PRESS: Norway Oil Fund Asked to Divest Coca-Cola Shares
Amit Srivastava, India Resource Center + 1 415 336 7584
Coca-Cola’s Conduct in India Violate Fund’s Ethical Guidelines
For Immediate Release
July 1, 2015
San Francisco: Activists from India and Norway are calling on Norway’s Government Pension Fund Global – the world’s largest sovereign wealth fund – to exclude the Coca-Cola company from its investment portfolio because of the company’s irresponsible water management practices in India.
The Government Pension Fund Global (the Fund), with a market value of 6,970 billion Norwegian Kroner (US$ 890 billion), has close to US$ 1 billion invested in the Coca-Cola company alone, and also has shares in other Coca-Cola related companies.
FIVAS – Foreningen for Internasjonale Vannstudier (Association for International Water Studies), a Norway-based NGO has produced a report – Dead in the Water – that highlights Coca-Cola’s water mismanagement in India. The report makes the case for the Fund to divest from the Coca-Cola company because the investment is financially risky and undermines social and environmental sustainability.
The report looks at Coca-Cola’s operations in Mehdiganj (Uttar Pradesh), Kala Dera (Rajasthan) and Plachimada (Kerala) and concludes that:
“Put together, the cases display similarities across different places and time. We observed that Coca-Cola’s commercial use of water has created or exacerbated local water scarcity in Mehdiganj, Plachimada and Kala Dera. This is in conflict with the Norwegian Government Pension Fund’s investor expectations and active ownership strategy on responsible water management in several aspects.”
The report argues that Coca-Cola’s operations in India which deprive communities of water is a violation of human rights. The UN General Assembly has explicitly recognized the human right to water and sanitation and acknowledged that clean drinking water and sanitation are essential to the realization of all human rights.
The Fund was established by the Norwegian Parliament in 1990 with the purpose to invest and safeguard state revenues generated from taxation of the petroleum operations in Norway.
The Fund is managed by Norges Bank, which is advised by the Council on Ethics to ensure that the investments are in compliance with the highly regarded Ethical Guidelines. Norges Bank also has expectations of companies operating in water scarce areas.
FIVAS had made a number of recommendations, including that Norges Bank “exclude companies with repeated breaches of water management expectations”, and for the Council on Ethics to “consider the companies Coca-Cola and Nestlé for exclusion….”
FIVAS has also asked the Coca-Cola company to cease operations in Mehdiganj and Kala Dera, and “adopt a global policy to not bottle commercial products in any water stressed areas using groundwater or surface water.”
The India Resource Center assisted FIVAS with the development of the report, and is planning to use the report and its recommendations to engage socially responsible investors globally on Coca-Cola’s ongoing unsustainable practices in India.
“Driven purely by a profit motive, Coca-Cola has located many of its bottling plants in water stressed areas of India, making access to water extremely difficult for communities that live around the plants. People need water, not Coca-Cola,” said Amit Srivastava of the India Resource Center, an international campaigning organization that has scrutinized Coca-Cola’s operations in India for more than a decade.
“Investing in Coca-Cola means complicity in the denial of a fundamental human right – access to potable water. We expect investors with a conscience to steer clear of Coca-Cola stocks,” he continued.
“We are surprised that the Norwegian Pension fund, which aims at a sustainable future, is earning money by owning Coca-Cola shares. The Fund strives for a higher standard for water management in the companies it invests in, but it seems unable to influence Coca-Cola’s abysmal track record for water management. Keeping Coca-Cola stocks undermines the sustainability aim of the Fund,” said Jonas Ådnøy Holmqvist, director of FIVAS.
The campaign to hold Coca-Cola accountable in India has succeeded in getting the government to issue new rules that prohibit beverage companies such as Coca-Cola from starting new plants in severely water stressed areas. The campaign is now working to extend the restriction to all water stressed areas, as well as plants that have existed before the new rules were issued in 2012.
The Fund has excluded companies from its portfolio in the past including Wal-Mart, Vedanta Resources and Rio Tinto.
For more information, visit www.IndiaResource.org and www.fivas.org
Jonas Ådnøy Holmqvist, FIVAS +47 93 25 33 97
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