Norway wealth fund pushes Tesla for union recognition, will keep its stake

By Terje Solsvik

OSLO (Reuters) -U.S. automaker Tesla (NASDAQ:) Inc should respect fundamental labour rights including collective bargaining, Norway’s $1.5 trillion sovereign wealth fund said, while adding it would keep its stake in the company and seek to influence policy over time.

The electric vehicle producer faces a backlash in the Nordic region from unions and some pension funds over its refusal to accept a demand from Swedish mechanics for collective bargaining rights covering wages and other conditions.

Norges Bank Investment Management (NBIM), the world’s largest stock market investor and Tesla’s 7th biggest shareholder with a 0.88% stake worth $6.8 billion, said on Saturday it had “no plans” to divest its holdings in the company, unlike some other funds.

“We expect companies in which we invest to respect fundamental human rights, including labour rights,” NBIM said in a statement to Reuters when asked about Tesla’s conflict with its Swedish workers.

“In 2022 we supported a shareholder proposal at Tesla that asked the company to introduce a policy to respect the right to organise,” it added.

The 2022 proposal, which NBIM said was supported by 32% of those who voted, called on Tesla to adopt a policy of respecting labour rights such as freedom of association and collective bargaining. The company’s board recommended a ‘no’ vote.

Tesla, which has revolutionised the electric car market, has managed to avoid collective bargaining agreements with its roughly 127,000 workers, and CEO Elon Musk has been vocal about his opposition to unions.

Tesla did not respond to a request for comment.

The company has said its Swedish employees have as good or better terms than those the union is demanding.

PensionDanmark, one of Denmark’s largest pension funds, said on Thursday it had divested its $69 million holdings in Tesla, while fund manager Paedagogernes Pension said it would follow suit and divest its $35 million stake.

NBIM said its expectations are built on international standards drawn up by the International Labour Organization (ILO) and global conventions on human rights.

In its expectations documents NBIM says that companies it invests in “should engage with workers and their representatives, such as trade unions” in a transparent manner when developing and implementing policies and practices.

‘WATCH LIST’

Denmark’s AkademikerPension said on Friday it would hold on to its $18 million stake in Tesla but added that it kept the car maker on a watch list and expected the parties to find a satisfactory solution to the ongoing conflict.

“It seems that it has not dawned on Tesla’s management that proper working conditions create more value and fewer risks in companies,” AkademikerPension’s CEO Jens Munch Holst said.

Sweden’s AP1 state pension fund, which held a $187 million stake at the end of June, said keeping a dialogue with Tesla was its preferred course of action over selling its shares.

Another Swedish fund, AP4, which has a $114 million Tesla stake, said the workers dispute did not constitute a basis for exclusion as a shareholding.

The New York State Common Retirement Fund said it has “long been concerned” with Tesla’s labour issues.

“We have filed multiple shareholder proposals and written letters seeking improvements to Tesla’s labor policies and parties,” it said in a statement. “Divestment is not a consideration at this time.”