Iconic Brazilian companies Vale SA and Eletrobras SA were removed from the world’s largest sovereign wealth fund due to environmental and human rights concerns...

Norges’s move deals a blow to Vale, which has taken steps to improve its image after a dam collapse early last year killed 270 people. The Rio de Janeiro-based mining company replaced its top manager, committed to decommissioning riskier dams, and built a treatment plant to clean up polluted water.

For Eletrobras, it’s also a reminder of the problems associated with the Belo Monte plant, where construction in the Amazon forest was marked by fierce opposition from environmental groups and a corruption scandal. Norges’s Council on Ethics said the project led to “increased pressure on indigenous lands, the disintegration of indigenous peoples’ social structures and the deterioration of their livelihoods,” with about 20,000 people displaced by the dam. The council also said the company has been involved in other projects that have been criticized for human rights violations. 

Eletrobras, controlled by the Brazilian government, said in a statement that it has taken “important strategic steps” to strengthen its commitment to human rights practices including closely monitoring subsidiaries like Belo Monte’s operator.

Vale declined to comment...