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OSLO, April 9 (Reuters) – Norway’s $1.3 trillion sovereign wealth fund, the world’s largest, should not include Saudi Arabian companies in the reference index governing the fund’s investment, the finance ministry said on Friday.
Saudi stocks should not be included due to environmental, social and corporate governance (ESG) risk, the ministry said in its annual recommendation to parliament.
The fund should also trim the size of its global company reference index by between 25% and 30%, to around 6,600 firms from 8,800 currently, primarily by removing smallcap stocks, the government proposed.
The fund currently holds stakes in around 9,100 companies, and a smaller reference index could, over time, lead to a cut in the number of companies owned.
The government rules in a minority and must win the support of other parties in parliament to pass its proposals.
Reporting by Gwladys Fouche, editing by Terje Solsvik
