Danish pension fund AkademikerPension has excluded Hungarian airline Wizz Air from its investment universe, based on the substandard treatment of the firm’s employees.
The institutional investor said investigations revealed the firm’s management repeatedly refused to recognise the employees’ right to freedom of association and their right to enter into collective bargaining in Romania, Ukraine, Norway and Italy.
The pension fund said examples of the firm’s opposition to trade unions and collective agreements are numerous. It cited the fact that in 2020 the company’s CEO József Varadi said the firm is against them, as trade unions are ‘killing the business’.
According to the AkademikerPension, several courts have also ruled that the company has exhibited discriminatory behaviour and fired employees because of their union affiliation.
The exclusion means that AkademikerPension has sold shares in the firm worth DKK22m (€2.95m).
Jens Munch Holst, director of the pension fund, said the management’s behaviour is in conflict with human and labour rights according to the UN’s Guiding Principles on Business and Human Rights.
‘The risk of being linked to a clear and persistent breach of our responsible investment policy is simply too high if we remain invested,’ he added.
Prior to the exclusion, AkademikerPension, together with Ardevora Asset Management, contacted the company’s management and asked for immediate changes in its treatment of employees.
Wizz Air agreed to a meeting following media pressure but informed the pension fund it was not planning to change its behaviour.
Munch Holst said, while exclusion is the last tool in a pension fund’s arsenal, it won’t be able to put pressure on companies to change course if the team is not ready to use it. This ultimately led to the exclusion of the airline from its investment universe.