Japan’s Kirin Holdings has been put on a watch list by the world’s largest sovereign wealth fund over business ties with the Myanmar military.

The Norwegian sovereign wealth fund, officially called the Government Pension Fund Global with $1.3 trillion of assets under management, said it would put Kirin Holdings on a watch list for possible exclusion over its ties with a business that had owned by Myanmar's military, according to a statement.

Norges Bank Investment Management, which manages the fund, held a 1.29 percent stake in the beer firm, as of 2020-end, valued at $277.1 million. 

Kirin Response

In early February, Kirin said it would scrap its joint venture – Myanmar Brewery – following the army’s staged coup to depose the democratically elected government, though it later said that it wanted to continue selling beer in the country.

Its controlling stake in the joint venture is valued at up to $1.7 billion.

«Serious Violations of Individuals’ Rights»

According to the Norges Bank, Kirin has been placed under observation «due to unacceptable risk that the company contributes to serious violations of individuals’ rights in situations of war or conflict». 

«The Council on Ethics has recommended to place the company under observation based on Kirin’s business cooperation with an organization with ties to the military in Myanmar,» the statement added. «Kirin has recently announced an intention to end this business cooperation, and the implementation of this will be followed up as a part of the observation.»

The country is undergoing violent unrest after demonstrations first broke out last month against the military's coup to depose the democratically elected government. Yesterday marked a new high in violence as nearly 40 people died after police and soldiers opened fire without warning, according to a «Reuters» report.

ESG Influencer

The sovereign wealth fund’s size and focus on environmental, social and governance-related issues make it a major player in sustainable finance for its influence over capital flows and investors.

It has stakes in over 9,000 companies worldwide, with ownership of about 1.5 per cent of all listed shares.

In addition to Kirin, the Norwegian lender also announced the reactivation of investments in Poland’s ATAL SA, after being excluded since 2017 for risk of human rights violation through the use of North Korean workers at Polish construction sites; and a probe into Germany’s Thyssenkrupp AG over its anti-corruption efforts.

 

 

https://www.nbim.no/en/the-fund/news-list/2020/decisions-on-observation-and-exclusion/