The Norwegian Government Pension Fund Global — the world’s largest sovereign wealth fund, with $2.1 trillion in assets — reviewed a Harvard Business School case study on ethical divestment and concluded that the existing policy had not been ambitious enough. If bulldozers were objectionable, the board reasoned, so was everything else. It compiled a list.
The list:
China. Russia. The United States. The United Kingdom. France. India. Brazil. Turkey. Saudi Arabia. The United Arab Emirates. Egypt. Iran. North Korea. Myanmar. Pakistan. Bangladesh. Indonesia. Vietnam. Ethiopia. Nigeria. The Philippines. Hungary. Belarus. Venezuela. Cuba. Mexico. Nicaragua. El Salvador. Guatemala. Honduras. Colombia. Peru. Bolivia. Argentina. Morocco. Tunisia. Algeria. Bahrain. Qatar. Kuwait. Oman. Jordan. Syria. Iraq. Afghanistan. Libya. Yemen. Sudan. South Sudan. Somalia. The Democratic Republic of Congo. Zimbabwe. Cameroon. Rwanda. Uganda. Tanzania. Kazakhstan. Uzbekistan. Tajikistan. Turkmenistan. Azerbaijan. Sri Lanka. Thailand. Cambodia. Laos. Haiti. Papua New Guinea. Fiji. The Maldives.
The fund will not be investing in the United States. The board described this as directly responsive to the curriculum.
The exclusion list covers ninety-four percent of global GDP, ninety-one percent of world stock market capitalization, and every member of the G20. The fund noted that this was, in retrospect, foreseeable. The board described the outcome as “clarifying.” Iceland’s sovereign wealth fund has called asking Norway to please stop. A subcommittee has been formed.
The fund then announced its remaining investable universe.
Andorra. Liechtenstein. Monaco. San Marino. Vatican City. Bhutan. The Faroe Islands. Palau. Nauru. Tuvalu.
The fund’s current portfolio is as follows: a 34% position in Andorran mountain hospitality; an 18% allocation to Liechtensteinian dental equipment; a 12% stake in Monégasque real estate, hedged; an 8% position in Bhutanese gross national happiness futures, which the fund notes are not a listed instrument but which the ethics board found philosophically compelling; and an 11% position in Tuvaluan jellyfish lake tours, which the board notes are, strictly speaking, in Palau, but which the fund considers close enough given the circumstances.
Tuvalu’s jellyfish lake tour operator was unavailable for comment. Vatican City’s sovereign wealth office noted that it does not have a sovereign wealth office.
The Harvard Business School professor who designed the case study was reached for comment. She noted that Divestment (A) was intended as an examination of institutional decision-making under competing constraints, not as a directive. She noted that the case included, on page four, a section titled “Fiduciary Responsibility and Its Limits.” She noted that the citation review had not been completed.
She was asked whether, in light of the fund’s determination, she had reviewed her own 401(k) for exposure to companies operating in countries with credible human rights violations.
“Divestment,” she said, “is not meant to be something applied based on universal principles. It is meant to be a vehicle for personal grievance.”
She has accepted a visiting fellowship. In Andorra. The fund has offered to cover her accommodation. She has not responded.
Editor’s note: The HBS divestment case has since been suspended pending review. The fund’s Andorran position remains open.
The original Caterpillar divestment is real. The $1.3 billion in foregone gains is real. The case study is real. The countries on the exclusion list have each been cited by at least one major international human rights organization in the past twelve months. Compiling the list took less time than anticipated.