Swedish state pension fund AP7 said on Friday it has blacklisted Tesla (TSLA.O) from its investment portfolio, citing verified violations of labor rights in the United States, and disclosed it had sold off its $1.36 billion stake in the automaker last month.
The decision marks a significant divestment by one of Sweden’s largest pension funds, which said it had engaged with Tesla for several years on the issue but found the company’s response inadequate. The electric vehicle maker accounted for about 1% of AP7’s equity fund before the divestment.
“AP7 has decided to blacklist Tesla due to verified violations of labor rights in the United States,” the fund said in a statement. “Despite several years of dialogue with Tesla, including shareholder proposals in collaboration with other investors, the company has not taken sufficient measures to address the issues.”
AP7 confirmed it sold its holdings in late May. At that time, the Tesla position was valued at approximately 13 billion Swedish crowns ($1.36 billion), though the fund managed around 1,181 billion crowns in total assets.
While other pension funds have reduced exposure to Tesla in recent years over concerns about CEO Elon Musk’s political activities, AP7 clarified that its decision was not based on political or governance factors but specifically on labor-related violations.
Tesla has faced a number of legal challenges over labor practices in recent years, including allegations of union suppression and discrimination at its Fremont, California, factory. In one high-profile case, a jury awarded former contract worker Owen Diaz $137 million over racial discrimination claims, a sum later reduced by a judge and eventually settled for an undisclosed amount.
Tesla has argued in some cases that restrictions in its factories, including on clothing, were based on safety concerns, and courts have sided with the company in those matters.
AP7 did not specify which violations were the basis for its latest decision, but its statement signals growing investor scrutiny on labor practices in the electric vehicle industry.
Source: Reuters