3 Product-based criteria

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Section 3 of the guidelines sets out the criteria for the “product-based observation and exclusion of companies” as follows:

(1) The GPFG shall not be invested in companies which themselves or through entities they control:

1. develop or produce weapons or key components of weapons that violate fundamental humanitarian principles through their normal use. Such weapons include biological weapons, chemical weapons, nuclear weapons, non-detectable fragments, incendiary weapons, blinding laser weapons, antipersonnel mines and cluster munitions
2. produce tobacco or tobacco-products
3. produce cannabis for recreational use

(2) Observation or exclusion may be decided for mining companies and power producers which themselves, or consolidated through entities they control, either:

1. derive 30 per cent or more of their income from thermal coal,
2. base 30 per cent or more of their operations on thermal coal,
3. extract more than 20 million tonnes of thermal coal per year, or
4. have the capacity to generate more than 10,000 MW of electricity from thermal coal.”

The Council’s work with respect to the product-based criteria involves assessing companies identified through the portfolio monitoring process. Each year, a number of cases are flagged up that relate to companies which have either ceased producing the types of weapons for which they were excluded or started producing new types of weapons which must be assessed in relation to the ethical guidelines. In 2023, one recommendation to exclude a company was issued on the basis of its involvement in the production of nuclear weapons. A recommendation was also issued to revoke the exclusion of one company that is no longer involved in the production of nuclear weapons.

With regard to the thermal coal criterion, the guidelines allow Norges Bank to make decisions concerning the observation or exclusion of companies without a recommendation from the Council. A division of labour has been agreed between Norges Bank and the Council, under which the Bank identifies and assesses companies which fall within the scope of the coal criterion. The Council’s consultant nevertheless reports to the Council on companies which may fall within the scope of the criterion. The Council shares all relevant information with the Bank.