OSLO (Reuters) – Norway’s $1.5 trillion sovereign wealth fund, the world’s largest stock market investor, told Reuters on Friday that U.S. automaker Tesla (TSLA.O) must respect basic labor rights, including bargaining. Collective.
The electric car producer is facing a backlash in the Nordic region from unions and some pension funds over its refusal to accept a request from Swedish mechanics for collective bargaining rights covering wages and other conditions.
Norges Bank Investment Management, which manages the Norwegian fund, is Tesla’s seventh-largest shareholder with a 0.88% stake worth about $6.8 billion according to LSEG data.
“We expect companies in which we invest to respect basic human rights, including workers’ rights,” NBIM said in a statement to Reuters when asked about Tesla’s conflict with its Swedish workers.
“In 2022, we supported a Tesla shareholder proposal requiring the company to introduce a policy to respect the right to regulate,” she added.
The 2022 proposal, which NBIM said was supported by 32% of those who voted, called on Tesla to adopt a policy of respecting labor rights such as freedom of association and collective bargaining. The company’s Board of Directors recommended a “no” vote.
Tesla, which has revolutionized the electric vehicle market, has managed to avoid collective bargaining agreements with nearly 127,000 workers, and CEO Elon Musk has been vocal about his opposition to unions.
Tesla did not respond to a request for comment on Friday.
The company said its Swedish employees enjoyed conditions as good or better than those demanded by the union.
PensionDanmark, one of Denmark’s largest pension funds, said on Thursday it had disposed of its $69 million holding in Tesla, while fund manager Paedagogernes Pension said it would follow suit and dispose of its $35 million stake.
NBIM declined to comment on whether its investments in Tesla would be affected by the automaker’s stance.
The Norwegian fund’s separate ethics board, which can recommend that NBIM divest from companies that do not meet its expectations, also declined to comment.
NBIM said its forecasts are based on international standards set by the International Labor Organization and global conventions on human rights.
NBIM says in its outlook documents that companies in which it invests “should engage with workers and their representatives, such as trade unions” in a transparent manner when developing and implementing policies and practices.
Denmark’s AkademikerPension said on Friday it would retain its $18 million stake in Tesla but added that it had kept the automaker on a watch list and expected both parties to reach a satisfactory resolution to the ongoing dispute.
“It seems that Tesla’s management did not occur to them that suitable working conditions create more value and less risk in companies,” said Jens Münch-Holst, CEO of AkademikerPension.
Swedish state pension fund AP1, which held a $187 million stake at the end of June, said maintaining dialogue with Tesla was its preferred course of action rather than selling its shares.
Another Swedish fund, AP4, which has a $114 million stake in Tesla, said the labor dispute did not constitute a basis for exclusion as a shareholding.
(Additional reporting by Terje Solsvik in Oslo; Additional reporting by Jacob Gronholt Pedersen in Copenhagen and Marie Manes in Stockholm) Editing by Kirsten Donovan and Elaine Hardcastle
Our standards: Thomson Reuters Trust Principles.
“Beer aficionado. Gamer. Alcohol fanatic. Evil food trailblazer. Avid bacon maven.”