The one trillion dollar Norwegian fund, one of the world’s largest, run by the Norwegian National Bank is oft cited as an example of money managers balancing heft and health to always land on their feet. Set up after the country struck oil in 1969 and subsequent prosperity, the fund now largely promotes green and sustainable portfolios. It has excluded 12 Indian companies including Coal India, TATA Power and Reliance Infrastructure over production of coal or coal based energy. Other Indian companies have been blocked on issues relating to corruption, greenhouse emissions and human rights violations.

Companies excluded from the $1 trillion Norwegian fund
Bharat Heavy Electricals Ltd Page Industries Ltd
CESC Ltd Reliance Infrastructure Ltd
Coal India Ltd Reliance Power Ltd
Gujarat Mineral Development Corp Ltd Tata Power Co Ltd
ITC Ltd Vedanta Ltd
NTPC Ltd Zuari Agro Chemicals Ltd


This fund has investments in some 9,000 companies worldwide including Apple, Nestlé, Microsoft and Samsung. On an average, the fund holds 1.5 per cent of all of the world’s listed companies. Let that sink in.

Trillions of dollars from pension funds and sovereign wealth funds are not available to Indian companies on grounds of environment protection, human rights and corruption barometers. Most are oil and gas funds and some are managed by dictatorships. The vast reservoirs of money that pension and sovereign funds hold are now compared to “green fields” with countries discussing legislation in their favour. This blog looks at some European funds.

Diplomacy, especially economic diplomacy is hypocrisy on a jet plane where the only interest is self-interest. A country’s economic heft, its military might or simply a strategic spot on the globe is used to cloud doublespeak. The pandemic has closed borders and minds enabling funds to cherry pick green and clean portfolios driven by political expediency. Everything is legal including exclusions that graze non-tariff barriers (NTBs) to trade.

At the time of writing comes news that the poisoning of Russian opposition politician Alexi Navalny could stymie Germany’s plans for using Russian natural gas as a stopgap source of energy en route to carbon-neutrality. “While the question over whether Germany really needs this gas is really less emotional than the politics, it’s also murky,” says Politico. German Chancellor Angela Merkel and Russian leader Vladimir Putin have always maintained a conversation through the highs and lows of realpolitik. How the Navalny issue moves will have consequences for geopolitics.

Climate is rightly king, but so is realpolitik as the German – Russian standoff shows. India’s economic growth is as important as protecting its borders and growth interests and choice is a luxury that must be now a negotiated reality.

The call to invest in green jobs, ending fossil fuel and keeping the focus on climate is a tough balancing act for India seeking growth on one hand and indigenous industrialisation on the other.

India’s contribution to destroying the world’s greens and driving species to extinction is small but it will grow as India progresses and consumes. We have to hold the world responsibly responsible without losing the conversation about our priorities as a developing nation. “Climate discussions…should certainly induce the ‘Global North’ to offer much larger resources – both financial and technical – to other nations in the battle against climate change,” one of India’s most respected businessperson Anand Mahindra, Chairman of the Mahindra Group, tweeted.

In a recent blog I wrote about an influential Swiss pension fund excluding TATA Power, L&T, Bharat Dynamics and Walchandnagar Industries from its portfolio. The exclusion (or blacklisting) was done without any discussion with the companies.

“Exclusion only happens when there is a violation of norms via company behaviour. Where the business model itself is in violation (cluster munitions in this case), there is no dialogue because we naturally cannot ask a company to change its business model,” Tamara Hardegger, Managing Director of the fund told me. The Swiss pension fund was created by seven of its 11 members who represent the Alpine nation’s top pension funds.

The writing on the wall is clear. The pandemic has closed borders and minds. Pensions, savings, defence, public health and national security are now dining table conversations. Voters want their money to be protected. A Danish and Dutch fund says pensions are all people have to live by so they must cut risky portfolios.

“Pensions are the source of income for people who have very little else, so it’s important to view them not as the whipped cream on top of a cake,” Jesper Berg the Director General of the Financial Supervisory Authority (FSA) said in an interview. The FSA is the life savings sector of Denmark that together with the Netherlands drives $650 billion. Long terms goals that includes people not just profits is the mantra.

The blacklisting and exclusions are not small matters. Indian businesses will find themselves increasingly hemmed in by various treaties and international commitments that will impede access to money, material and knowledge sometimes without our knowledge. In most cases national governments are guarantors of the treaties through the respective finance, trade, environment and human rights ministries. Geopolitics always decided how low and middle-income countries (LMICs) grew or didn’t. Now the veil is off.

Boardroom and high table conversations, media, policy analysts and think tanks now actively engage with mechanisms related to environment, social and governance (ESG) models. A United Nations (UN) Principles of Investment (PRI) document first spoke of this model in 2006. What was seen as just another piece of non-binding text is now part of domestic treaties in developed countries. Watering holes like Davos, G 7, and G 20 speak about them and some companies have built in sustainable development goals (SDGs) in their financial evaluations.

The PRI started with 63 investment companies and funds with assets under management (AUM) totalling $ 6.5trillion. Thirteen years later 2, 450 signatories representing over $80 trillion were part of PRI. Most of these funds are directly or indirectly linked to the country’s central banks, finance or other nodal ministries and bodies. This means the Indian government can keep a conversation line open with them. Engagement is critical.

Our strength in speaking at international conferences and signing on to goals and treaties will have a cost if we don’t find domestic solutions to our growth. If every Indian seeks 24/7 electricity and access to water – and that’s a minimum – what are our options now? We need a national consensus.

India has some of the world’s best diplomats and negotiators. Their work must be strengthened by New Delhi. We have to call out bullying and chart our growth as suits us best. Democracy is a shared and felt responsibility and 1.3 billion people deserve nothing but the best. The world respects countries that respect themselves.

Also Read: TATA Power and Indian government-owned missile maker Bharat Dynamics among four Indian companies excluded for investments by influential Swiss Pension fund