* Fund sells out of 23 Asian firms to slow deforestation
* Environmentalists welcome shift, urge more action
By Joachim Dagenborg and Alister Doyle
OSLO, March 8 Norway's $710 billion sovereign
wealth fund has pulled out of 23 Asian palm oil companies after
accusing them of causing deforestation, winning praise from
It said it sold stakes in the firms after a review of
companies that have cleared forests for palm oil plantations in
Malaysia and Indonesia. Palm oil is used in many foods and
consumer goods such as soaps, lipstick and peanut butter.
The fund is one of the world's biggest investors,
underpinned by Norway's oil and gas assets. Last year it
expanded its investment guidelines to include deforestation as a
threat to future growth.
Stakes in firms including Wilmar, KL Kepong
and Golden Agri-Resources Ltd were sold
during 2012, according to the fund's annual report released on
Of these, the biggest holding had been in Singapore-listed
Wilmar, worth 382 million crowns ($67.29 million).
"In the first quarter of 2012 we sold our stakes in 23
companies that by our reckoning produced palm oil
unsustainably," the fund said, without naming any firms.
Norway has given more than any other developed nation to
help slow deforestation, partly as a way to avert climate
change. Indonesia is home to the world's third-largest expanse
of tropical forests and is the top prodicer of palm oil.
Malaysia is the world's second largest producer.
The companies deny that they are a threat to forests.
Golden Agri's website, for instance, says: "we aim to be the
leader in sustainable palm oil production." Wilmar and KL Kepong
similarly say that they support best practices and standards to
protect the environment.
The Rainforest Foundation environmental group has long
accused Norway of double standards by investing billions of
dollars in palm oil or soya farmers while also giving cash to
nations from Brazil to Indonesia to slow deforestation.
"We are very happy with this development in the palm oil
sector," said Nils Hermann Ranum, of Norway's branch of the
Still, he said that Norway should do more to pull out of
other sectors that cause deforestation, such as logging
companies, oil and gas firms, soya and meat producers.
By the Foundation's estimates, Norway had investments
totalling $13.2 billion in companies damaging rainforests at the
end of 2012, against $14.4 billion a year earlier. "They need a
more coherent policy," he said.
Norway has programmes to slow deforestation worth $1 billion
each for Brazil and Indonesia, as well as smaller projects in
nations from Guyana to Tanzania.
Many companies, including Anglo-Dutch consumer group
Unilever Plc and Swiss food group Nestle,
have cracked down on palm oil suppliers in recent years because
of worries about deforestation.
Deforestation accounts for up to about a fifth of greenhouse
gases from human sources. Forests soak up carbon dioxide as they
grow and release it when they burn or rot.
Yngve Slyngstad, head of Norway's fund, told Reuters that
Oslo was trying to invest more in palm oil producers whose
policies did not damage forests that are home to endangered
animals such as orang-utans and absorb greenhouse gases.
"We have sold many of the small companies and concentrated
investment in larger companies who often have a better
practice," he said.
Among palm oil firms, the fund more than quadrupled its
holdings in Malaysia's Sime Darby to a value of 688.8
million crowns at the end of 2012 from 150.7 million crowns a