Norges Bank has decided to revoke the exclusion of one company and instead place it under observation, to initiate special ownership dialogue with three companies, and to exclude two companies.
The Executive Board has decided to ask Norges Bank Investment Management to engage through active ownership with the companies Rio Tinto Plc, Rio Tinto Ltd and South32 Ltd on their work to reduce serious environmental damage over a period of 5-10 years. The Council on Ethics recommended excluding the companies based on the companies' participation in the joint venture Mineração Rio do Norte (MRN), which operates a bauxite mine in the Amazon rainforest. See further details in Appendix 1.
The Executive Board has further decided to revoke the exclusion of RWE AG (RWE) and instead place the company under observation. The decision was made on the basis of a recommendation from Norges Bank Investment Management. Norges Bank may, on its own initiative, make decisions on observation and exclusion based on certain criteria in the guidelines, and on the revocation of such decisions, ref. the Guidelines for Observation and Exclusion from the Government Pension Fund Global, section 6 (1).
The German company RWE was excluded in 2020 after an assessment against the product-based coal criterion. At the time, it was considered that the company had extraction of coal that exceeded the threshold of 20 million tonnes per year and production of coal power that exceeded the threshold of 10,000 MW of capacity.
RWE has committed to a plan to phase out all lignite extraction and combustion in Germany by 2030, and the reduction towards 2030 follows a set plan. In line with the plan, the company will gradually shut down both power plants and mines towards 2030. Several milestones have already been reached. We consider that the coal-fired power capacity is now below the absolute threshold specified in the coal criterion. Coal mining will nevertheless remain above the threshold for some time to come.
At the same time as the shutdown of coal extraction and power production, RWE is building up significant production from renewable energy sources. This development is also planned to continue. See further details in Appendix 2.
Norges Bank's Executive Board has furthermore decided to exclude the company Petroleos Mexicanos due to an unacceptable risk that the company contributes to or is responsible for gross corruption, ref. the conduct-based criterion in section 4(g) of the Guidelines for Observation and Exclusion from the Government Pension Fund Global.
The decision is based on a recommendation from the Council on Ethics of 18 November 2024.
The Executive Board has also decided to exclude the company Paz Retail and Energy Ltd due to an unacceptable risk that the company contributes to serious violations of the rights of individuals in war or conflict, ref. the conduct-based criterion in section 4 (b) of the Guidelines for Observation and Exclusion from the Government Pension Fund Global.
The decision is based on a recommendation from the Council on Ethics of 19 December 2024.
The Executive Board has not conducted independent assessments of all aspects of the recommendations but is satisfied that the exclusion criterion in the two latter cases has been fulfilled. Before deciding to exclude a company, Norges Bank shall consider whether the use of other measures, including the exercise of ownership rights, may be better suited. The Executive Board concludes that it is not appropriate to use other measures in these cases.
The Council on Ethics' recommendations:
Rio Tinto PLC and Rio Tinto Ltd
South 32 Ltd.
Petroleos Mexicanos
Paz Retail and Energy Ltd
Line Aaltvedt
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