The world’s largest sovereign wealth fund has reduced its investments in Brazil by nearly R$20 billion, or more than US$3.7 billion. The decline occurred between 2019 and 2021, coinciding with the Jair Bolsonaro government.
The Norwegian State Pension Fund, valued at US$1.4 trillion and powered primarily by oil revenue, allocates its resources to more than 11,000 companies and projects in 69 countries around the world.
However, in Brazil, the volume is decreasing, as is the country’s share in the fund’s total investments. In 2019, the Scandinavians allocated US$9.6 billion to Brazil, 10% of which went to Petrobras. A year later, the value was $6.8 billion. If at the end of 2019 the Norwegians allocated 0.9% of the fund to Brazil, the rate fell to 0.5% in 2020. In total, 151 Brazilian companies rely on Norwegian resources or investments, including banks, airlines, retail, transportation and cleaning.
In 2021, investment volume fell again. At the end of last year, the flow was US$6 billion, which is just 0.4% of the entire resource flow from the Norwegian fund to the world.
When contacted, the fund said it would not comment on specific markets. But he noted that his streams also follow the FTSE Global indices, which measure the performance of the world’s largest economies and nearly 9,000 listed companies.
But the decline also coincides with the suspension of Brazilian companies from the list of beneficiaries of Scandinavian targeted amounts.
One of the companies affected was Vale after assessing the company’s risk of causing “significant environmental damage.” “As a result of repeated dam failures, Vale was recommended to be excluded,” Asset said in a statement at the time.
The Fund’s Ethics Committee further explained that the recommendation to exclude Vale was made “because of an unacceptable risk to which the company contributed or was itself liable for serious environmental damage.”
“Vale is the world’s largest producer of iron ore and operates different types of mining and other activities in about 30 countries. In November 2015, a tailings dam malfunctioned at a mine in Brazil owned by Samarco, a 50/50 joint venture between Vale and BHP Billiton. The incident killed 19 people and had serious environmental consequences. An investigative report commissioned by BHP Billiton pointed to serious flaws in the dam. The flaws were so great that the company was most likely aware of them.”
“In January 2019, Vale’s another tailings dam in Brazil collapsed, temporarily causing a total of 237 deaths,” the funder said in June 2019. 12, 2020.
During this time, the Fund also decided to exclude Eletrobras from its investments “due to the unacceptable risk that the company may contribute to serious or systematic human rights violations”. “It was suggested that the company be excluded because of human rights violations related to the development of the Belo Monte dam in Brazil,” they said.
Earlier, in 2018, the Fund’s Ethics Committee also recommended that JBS Inc. be excluded “due to the risk of corruption”. “Former management and board members of JBS admitted to bribing more than 1800 politicians from 28 different political parties in Brazil over the past 10-15 years,” he said.
source: Noticias
