Norwegian Wealth Fund: Norway’s sovereign wealth fund, managing $1.5 trillion, has called on U.S. electric vehicle giant Tesla Inc (TSLA.O) to uphold fundamental labor rights, emphasizing the importance of collective bargaining. Despite the backlash faced by Tesla in the Nordic region for rejecting the demand for collective bargaining rights by Swedish mechanics, Norway’s sovereign wealth fund, Norges Bank Investment Management (NBIM), has expressed its intention to retain its 0.88% stake in the company, worth $6.8 billion.
Tesla’s refusal to engage in collective bargaining discussions with Swedish workers has triggered criticism from unions and pension funds in the Nordic region. However, NBIM, Tesla’s 7th largest shareholder globally, has opted to retain its stake, asserting its commitment to influencing policy over time.
NBIM outlined its expectation for companies it invests in to respect fundamental human rights, including labor rights. The sovereign wealth fund highlighted its support for a 2022 shareholder proposal at Tesla, which garnered 32% support. The proposal urged Tesla to adopt a policy respecting labor rights, including the right to organize and engage in collective bargaining. Despite this, Tesla’s board recommended against it.
Tesla, led by CEO Elon Musk, has been resistant to collective bargaining agreements for its sizable workforce of approximately 127,000 employees. Musk has been vocal about his opposition to unions. Despite the controversy, Tesla maintains that its Swedish employees enjoy terms that are as good as or better than those demanded by the union.
While some pension funds, like Denmark’s PensionDanmark, have divested their holdings in Tesla due to the labor dispute, NBIM has chosen a different approach. The sovereign wealth fund’s expectations are rooted in international standards established by the International Labour Organization (ILO) and global conventions on human rights.
Notably, NBIM’s stance aligns with its documented expectations for the companies it invests in, emphasizing transparent engagement with workers and their representatives, including trade unions, in the development and implementation of policies and practices.
As the controversy surrounding Tesla’s labor practices unfolds, the Norwegian sovereign wealth fund stands as a key shareholder urging the company to prioritize and respect fundamental labor rights in its operations.
Our Reader’s Queries
How much is Norway’s Wealth fund?
The Norwegian central bank has recommended that the world’s largest sovereign wealth fund, valued at $1.5 trillion, should consider investing up to $70 billion in private equity. This move would diversify the fund’s portfolio and potentially increase returns. The recommendation comes as the fund faces challenges in finding profitable investments in a low-interest-rate environment.
How much did Norway’s sovereign wealth fund lose?
The Government Pension Fund Global, the world’s largest sovereign wealth fund, experienced a significant loss of $34 billion in the third quarter. This loss was due to a weaker three-month period, which was in contrast to the positive returns seen in the first half of the year. All asset classes were affected by this downturn, resulting in a return of 374 billion Norwegian kroner ($34 billion). Despite this setback, the fund remains a major player in the global financial market.
What does Norway use the sovereign wealth fund for?
As the biggest single owner in global stock markets, the fund has a diverse portfolio that spans across various countries, sectors, and currencies. It invests in shares, bonds, and real estate worldwide, but only outside Norway to prevent the economy from overheating. With its extensive holdings, the fund is a major player in the international investment scene.
Which country has the largest wealth fund?
The Norway Government Pension Fund Global tops the list of rankings by total assets with a whopping $1,477,729,733,526. Following closely behind is the China Investment Corporation with $1,239,943,000,000 and SAFE Investment Company with $1,090,000,000,000. The Abu Dhabi Investment Authority also makes the list with $853,000,000,000 in total assets. With 93 more rows to go, it’s clear that these companies are some of the wealthiest in the world.