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Ethical exclusions

There are some companies we choose not to invest in, because their products or conduct violate fundamental ethical norms. Excluding these companies reduces the fund’s exposure to unacceptable risks. All exclusions are based on recommendations from an independent Council on Ethics.

What are ethical exclusions?

The Norwegian Ministry of Finance has issued a set of ethically motivated guidelines for observation and exclusion from the fund. These guidelines contain criteria for the exclusion of companies based on their products or on their conduct. The Ministry set up the independent Council on Ethics to perform ethical assessments of companies and make recommendations to Norges Bank’s Executive Board, which takes the final decision on whether companies should be excluded from the fund, placed under observation, or followed up through active ownership.

Since 2015, Norges Bank has also been able to exclude companies or place them under observation under the coal product criterion on its  own initiative. In 2022, the guidelines were amended so that Norges Bank can make decisions on its own initiative based on the conduct-based greenhouse gas criterion.

Which companies are excluded?

Product-based exclusions

The fund must not invest in companies which themselves, or through entities they control, manufacture weapons that violate fundamental humanitarian principles through their normal use, or sell weapons or military materiel to certain countries. Nor may it invest in companies that produce tobacco or cannabis for recreational use. 

There is also a product-based criterion covering companies in two categories: mining companies that derive 30 percent or more of their revenue from coal or produce more than 20 million tonnes of thermal coal per year, and power companies that derive 30 percent or more of their revenue from coal-based power generation or have coal-based power generation capacity of more than 10,000 MW.

No further companies were excluded under the product-based criteria in 2023. A total of 107 companies that produce certain types of weapons, tobacco, cannabis or coal, or use coal for power production, are currently excluded from the fund.

Conduct-based exclusions

Companies may also be excluded if there is an unacceptable risk of them contributing to or being responsible for particularly serious violations of fundamental ethical norms. Norges Bank's Executive Board bases its decisions on an assessment of the probability of future violations, the severity and extent of the violations, and the connection between the violations and the company in which the fund is invested.

Companies may be excluded or placed under observation if there is an unacceptable risk that the company contributes to or is responsible for:

  • serious or systematic human rights violations
  • serious violations of individual's rights in situations of war or conflict
  • the sale of weapons to states engaged in armed conflict that use the weapons in ways that constitute serious and systematic violations of the international rules on the conduct of hostilities
  • the sale of weapons or military materiel to states that are subject to investment restrictions on government bonds
  • severe environmental damage
  • acts or omissions that on an aggregate company level lead to unacceptable greenhouse gas emissions
  • gross corruption or other serious financial crime
  • other particularly serious violations of fundamental ethical norms
conduct-based exclusions in 2023

In 2023, six companies were excluded on the grounds of conduct considered a particularly serious violation of ethical norms, while two exclusions were reversed. A total of 57 companies were excluded because of their conduct at the end of 2023. The observation of two companies came to and end during the year.

Alternative measures

Before Norges Bank’s Executive Board decides to exclude a company, the Bank must consider whether other measures might be more effective in reducing the risk of continued norm violations by the company, and whether such measures might be more appropriate for other reasons. For example, we might use active ownership – dialogue and voting at shareholder meetings – to steer a company in the right direction.

Last saved: 07/02/2024

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