GAPP Principle 21

SWFs view shareholder ownership rights as a fundamental element of their equity investments’ value. If an SWF chooses to exercise its ownership rights, it should do so in a manner that is consistent with its investment policy and protects the financial value of its investments. The SWF should publicly disclose its general approach to voting securities of listed entities, including the key factors guiding its exercise of ownership rights.

Status: Implemented

See also response to principle 19. Norges Bank has established principles for the responsible management of the GPFG investments. The principles give priority to the areas of standard setting, ownership, and risk management.

The management mandate issued by the Ministry of Finance stipulates that Norges Bank shall make investment decisions and exercise ownership rights independently of the Ministry. The Bank publishes a set of ownership principles and expectations documents on specific topics to ensure transparency and predictability in the exercise of ownership rights associated with Fund investments. The overall objective for the exercise of ownership rights is to safeguard the financial interests of the GPFG in the long term.

Norges Bank seeks to influence companies in its role as a financially motivated shareholder, in accordance with the management mandate for the Fund. As minority shareholder in listed companies, ownership activities will be conducted according to priorities that consider factors such as market, sector and company characteristics, the significance of the investment, ownership share and rank, and whether ownership activities are likely to be effective. Ownership activities will primarily take the form of voting and company dialogue.

Norges Bank aims to vote at all shareholder meetings of companies in which the Fund is invested. Voting will be principle-based yet cater to the specific circumstances of the individual company. The Bank reports on its voting activities and publishes their voting instructions and rationales five days before the shareholder meeting where practicable. In cases where the Bank votes against the board’s recommendation, an explanation is provided. Voting records are disclosed in full on the manager website.

NBIM has published documents on standard setting, voting position papers and voting guidelines, industry initiatives and investor expectations towards companies within specific areas. The expectations documents formulate expectations as to how companies should manage risk and report on relevant activities and serve, among other things, as a starting point for company dialogue and the exercise of ownership rights. Issues for which expectations documents have been formulated include children’s rights, climate change, water management, human rights, tax and transparency, anti-corruption, ocean sustainability, biodiversity and ecosystems, and human capital management.

Sources: GPFG mandate, Norges Bank’s website.