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In the spring of 2016 we spotlighted the American engineering and construction company Fluor Corporation, which delivers e.g. integrated solutions for complex projects. At first sight an impeccable company. We had ascertained that it was not on the exclusion list of the Norwegian Government Pension Fund Global, and Pareto Global had indeed bought a minor position.

Such business runs counter to the ethical guidelines we follow in our asset management.

Finn Øystein Bergh, Chief Investment Officer

Nevertheless, we decided to undertake a closer examination and found, in a joint venture representing two per cent of Fluor revenues, a project that made us uncomfortable. This was a nuclear waste cleanup project, apparently a most commendable purpose. However, it also included production of the radioactive gas tritium, which in this case had but a single purpose: maintaining the functionality of nuclear warheads.

Such business runs counter to the ethical guidelines we follow in our asset management. Hence, in April 2016, we removed the company from the Pareto Global portfolio. In January 2018 Norges Bank Investment Management, which manages the Government Pension Fund, announced that they had come to the same conclusion after a long period of deliberation. At that time, regardless of their decision, Fluor Corporation was not an option for our fund managers.

Did we lose money on our decision? Certainly not. After almost two years following our exit, the share had hardly budged, while the market had appreciated by more than 30 per cent.


The article is an excerpt from our 2017 Annual report.

Historical returns are no guarantee for future returns. Future returns will depend, inter alia, on, market developments, the portfolio manager's skill, the fund's risk profile, as well as fees for subscription, management and redemption. Returns may become negative as a result of negative price developments.

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Pareto Asset Management shall exercise active ownership in the portfolio companies in order to promote responsible business operations. This means that we will use our ownership rights and influence in the companies to help move the companies in a positive direction in terms of social relations, environmental issues, sustainability and good corporate governance.