Sustainability due diligence | Norges Bank Investment Management

We seek to identify and assess potential and actual adverse impacts which our investee companies may cause, contribute or be directly linked to. As a minority investor, we cannot instruct companies to act, but we can use leverage to encourage them to take steps to prevent and mitigate these impacts where appropriate.

We may use our leverage through engagement, for instance, company dialogue or voting. We can also engage with standard-setters and regulators to impact market standards. If engagement objectives are not met over time and the future risk is not reduced, we may, within our mandate, consider risk-based divestment.

Risk-based divestments are investment decisions where we identify environmental, social, or governance issues that create high risk for the fund. The risk and return implications for the fund are central in all decisions. Risk-based divestments are active decisions within our tracking error limits that affect relative return. Under the temporary ethical guidelines for the fund, we may also exchange information on companies with the Council on Ethics for their consideration.

More details of how we have integrated findings from our sustainability due diligence can be found in our Responsible investment report 2025.

Embedding responsible business conduct into policies and management

We seek to respect human rights in our activities. As stated in our principles and policy for responsible investment management, we base our work on relevant international standards and principles, including the UN Global Compact, the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct, and its subsequent guidance for Institutional Investors, the UN Guiding Principles on Business and Human Rights, and the G20/OECD Principles of Corporate Governance.

These principles and standards form the basis for our expectation documents. These expectations are the starting point for our engagement with investee companies. We expect our portfolio companies to integrate material sustainability issues into their policies, strategies and risk management practices, and that they should identify, assess and manage adverse impacts. We monitor sustainability risks and embed due diligence in our work across asset classes. We also convey our expectations to external managers.

We expect our portfolio companies to integrate material sustainability issues into their policies, strategies and risk management practices

Identifying and prioritising actual and potential adverse impacts

We have several integrated processes that aim to identify companies that could have significant adverse impacts on people and planet – both before and after we invest. Limited access to information or rapidly changing circumstances can make it challenging to assess these impacts and the companies’ connections to them. We use external data sources, news media, company reports and information from stakeholders, including rightsholders, with the support of advanced artificial intelligence tools, to make our assessments and prioritise our efforts. We systematically analyse sustainability risks across all companies entering the fund’s equity benchmark on a quarterly basis. All companies in our equity portfolio and equity benchmark index are monitored daily for severe sustainability-related incidents.

Our quarterly sustainability due diligence screening evaluates investee companies’ exposure to sustainability risks. The screening is based on our expectation documents and relies on relevant quantitative data. Beyond our quantitative and automated processes, we may conduct deeper research into topics and trends related to heightened or emerging sustainability risks. We undertake a detailed assessment of the sustainability risk profile of companies where our ownership share has surpassed five percent during the year, thus making the fund a significant owner.

Our sustainability risk monitoring efforts focuses on companies with the most significant potential and actual impacts in terms of scale, scope and irremediability. Based on the level of risk identified and other factors including the size of our investment, we may take the following actions: i) ongoing monitoring, ii) share information with relevant teams iii) initiate or continue engagement with the company, iv) share information with the Council on Ethics, and v) consider risk-based divestment if there is a significant risks to company value or broader portfolio risks, and where ownership seems less likely to be effective.

Enhanced human rights due diligence in conflict-affected and high-risk areas

In 2025, we continued to strengthen our sustainability due diligence framework to better identify and assess companies' exposure to conflict-affected and high-risk areas (CAHRAs). Building on international standards, we developed a systematic screening methodology that combines multiple data sources to evaluate companies' operational footprint in contexts where governance structures may be weakened and the risk of severe human rights violations is elevated.

Our framework assesses both the geographic exposure of portfolio companies and the nature of their business activities, improving our oversight of heightened risks across our holdings. This enhanced approach informs our engagement priorities and helps us target our dialogues with companies. Where we identify material exposure to conflict-related risks, we may engage with companies to understand how they conduct enhanced human rights due diligence in practice, how they assess and manage salient human rights risks in challenging and volatile operating environments, engage with stakeholders, and whether they have accessible and effective grievance mechanisms.

We prioritise this work given the volatile and rapidly evolving nature of conflict situations. At the same time, we recognise the complexity of the operating environments companies face, that investor engagement has its limits as an ownership tool, and the boundaries of our work as a responsible investor.

Seeking to prevent and mitigate adverse impact

Active ownership is our primary tool for encouraging investee companies to prevent and mitigate adverse impacts. Our engagement approach is informed by the nature of the risk or issue, and an assessment of our leverage, including the size of our investment and previous dialogue with the company. We set clear objectives for each company dialogue, such as improved policies and management systems, remediation or increased transparency. We engage with company boards, management, subject-matter experts, and may send letters to company boards, especially those that appear to inadequately manage sustainability risks. In addition to dialogue, we may escalate our engagement for instance by voting against board members at a company’s annual meeting, or supporting timely and well-founded shareholder proposals.

We engage with relevant international organisations, standard setters and regulators to contribute to the development and adoption of standards on corporate governance, corporate disclosures, responsible business conduct and climate risk. We also participate in the development of best practices for responsible investment. We share our investor perspective with standard setters by responding to public consultations and meeting their experts. We publish our responses to consultations on our website.

Active ownership is our primary tool for encouraging investee companies to prevent and mitiage potential and actual adverse impact.

Tracking and communicating results

We have systems to track companies’ progress in addressing their sustainability risks. With set objectives for each company dialogue, we can track outcomes, helping us focus our company interactions and ensure internal coordination. We disclose our engagement with companies and share information about the dialogues across topics through our responsible investment report, website and ongoing stakeholder dialogue. We publish our policies and frameworks, and report on our prioritised dialogues, divestments and exclusions. We also publish our voting intentions five days ahead of shareholder meetings.

Stakeholder engagement and grievance mechanism

We draw on internal and external expertise to assess risk and engage in meaningful consultation with different stakeholders. We encourage stakeholders to share information that they believe could be relevant for our investments and engagements. We expect companies to maintain effective and accessible grievance mechanisms and to engage with their stakeholders, including workers and their representatives. We expect companies to provide or cooperate in remediation where required, as set out in the UN Guiding Principles on Business and Human Rights and the OECD Due Diligence Guidance for Responsible Business Conduct.

We expect companies to maintain effective and accessible grievance mechanisms and to engage with their stakeholders, including workers and their representatives.

Who's involved in this work?

The Executive Board is responsible for establishing principles for responsible investment management, which cover Norges Bank Investment Management’s due diligence efforts. Due diligence tasks are conducted by several teams, including the risk monitoring, active ownership and investment teams. Norges Bank Investment Management’s Leader Group and Norges Bank’s Executive Board are regularly updated on matters related to responsible investment.

Latest report on responsible investment

Our mandate is to generate financial returns for current and future generations of Norwegians. This requires that our investments achieve sustainable value over time. In 2025, we launched our updated Climate action plan towards 2030, improved our sustainability reporting and used AI to enhance our risk monitoring.

More on the reporting