Cladding Scandal: Norges Bank responds to building safety campaigners about divesting from cladding firms
Norges Bank Investment Management told campaigners it had already contacted a number of firms about product safety concerns
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A Norwegian investment bank which runs the country’s pension fund and is also a major shareholder in many of the firms caught up in the building safety crisis has responded to a letter calling for it to pressure the developers to pay for remediation costs.
Norges Bank Investment Management (NBIM) wrote back to the campaigners to say human rights are a factor in its investment decisions, and it has written to a number of developers with concerns about product safety.
At a glance: 5 key points
- An alliance of cladding and building safety campaigners, backed by the Father of the UK House of Commons, Sir Peter Bottomley MP, wrote to Norges Bank Investment Management last week, requesting that it leverage its position as a major shareholder to convince firms to fully compensate Grenfell victims and resolve buildings’ fire safety defects
- Norges Bank Investment Management is a major shareholder in Arconic, Kingspan and Saint Gobain, firms all directly linked to the Grenfell tragedy, plus a number of developers who have not agreed to cover the costs of remediation works on buildings in violation of existing safety standards
- The campaigners called on the bank to pressure the firms to offer compensation and to divest its holdings in these firms if they fail to do so
- In its reply, the bank stopped short of agreeing fully to the campaigners demands, but did reiterate its consideration of human rights issues, and stated that it has “raised product safety with several of the companies mentioned” in the original letter
- The government recently announced that it would ask the companies responsible to foot the bill for expensive remediation works on leasehold properties
What’s been said?
In a letter to NBIM the campaigners wrote: “The Grenfell Tower fire occurred in June 20. It was the worst structural fire in almost 40 years; 72 lives were lost and a further 70 were injured with devastating and as yet unresolved consequences for the Grenfell community. The fire burned for over 60 hours, involved more than 250 firefighters and necessitated 100 ambulance crews.
“The resulting re-evaluation of regulations and national rollout of widespread external wall surveys have exposed a UK-wide fire safety defect crisis. This crisis has meant that at least 3,000,000 leaseholders are trapped in flammable flats they cannot sell, they are financing interim fire safety costs that they cannot afford to pay, and facing repossession/forfeiture over life-changing bills to make homes safe. This, in turn, has led to a burgeoning mental health crisis.”
Chief corporate governance officer at NBIM, Carine Smith Ihenacho, and global co-head of corporate governance at NBIM Wilhelm Mohn responded to the letter, writing: “We base our membership engagement with companies on our public company expectations. We report annually on our activities in a responsible investment report. We do not, however, comment on a more ongoing basis on ownership engagements or other investment related information concerning individual companies we invest in.
“However, we can confirm that we have raised product safety with several of the companies mentioned in your letter. This is a topic we will continue to monitor, and we appreciate the information you have shared with us.”
Housing Secretary Michael Gove said: "Developers and cladding companies who caused these problems must pay to fix them. We want these companies to do the right thing and help end this scandal.”