Campaigners have called on Norway’s $1.4tn oil fund to divest from the companies that manufacture the cladding products used on Grenfell Tower and from property developers, opening a new line of attack against businesses embroiled in the UK’s building safety crisis.
Leaseholders in blocks caught up in the crisis have written to Nicolai Tangen, chief executive of Norges Bank Investment Management (NBIM), which oversees the country’s sovereign wealth fund, urging the group to “leverage its position as [a] major shareholder” to pressure 11 builders and cladding manufacturers or pull funds from the companies.
Those companies are coming under increasing scrutiny for their role in developing homes that are now considered unsafe.
Concerns were raised about hundreds of thousands of homes in the UK in the aftermath of the 2017 fire at Grenfell Tower in London, in which 72 people died.
The Grenfell fire and subsequent inquiry has “exposed a UK-wide fire safety defect crisis”, said the campaigners in the letter, which was first reported in The Times.
“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,” they added.
Flammable cladding was found to be a principal cause of the Grenfell fire’s rapid spread and a still-running inquiry into the blaze has probed the role of three companies involved in producing the materials used on the tower: Kingspan, Arconic and Saint-Gobain. NBIM is a significant shareholder in all three businesses, with stakes of between 2 per cent and 4.5 per cent that are worth a total of about £1.5bn.
The UK’s largest developers have also been implicated in the building safety crisis. NBIM is an investor in UK-listed housebuilders Barratt Developments, Bellway, Berkeley, Crest Nicholson, Persimmon, Taylor Wimpey and Vistry, as well as Australian developer LendLease, which has a number of major UK projects.
In their letter, the campaigners call on NBIM to use its position as a major shareholder to push the companies “to resolve the buildings’ fire safety defects and fully compensate the victims of the Grenfell Tragedy; and divest its holdings in these firms if they fail to do so”.
Lobbying major shareholders is a new strategy in leaseholders’ campaigns to make corporations who developed and clad their properties pay for any remedial work. NBIM has a strong focus on responsible investment and has previously excluded tobacco companies and nuclear weapons producers from its portfolio.
Developers were singled out last week by UK housing secretary Michael Gove, who has backed the campaigners’ call to action. He has insisted the “polluter pays” to fix unsafe buildings and has pledged to spare “innocent leaseholders” the costs of doing so. Gove has told developers to come up with a plan and the funds to fix buildings that are between 11 metres and 18 metres tall, a job with an estimated cost of £4bn.
“We want these companies to do the right thing and help end this scandal,” said Gove. “In the coming weeks, we will discuss with them how they can do that — if industry does not co-operate, we are prepared to impose a solution in law.”
The government has created a separate £5.1bn fund for the removal of cladding on taller buildings.
NBIM did not respond to a request for comment.