3 The Council’s activities, 2015–2025
3.1 Introduction
In its 2014 annual report, the Council on Ethics summarized its first ten years in connection with significant amendments to the ethical guidelines for the Government Pension Fund Global. As the guidelines established at that time have now been suspended, the Council on Ethics considers it appropriate to once again summarize certain key features from the past decade. The aim is to highlight experiences that may be relevant to the assessment of the GPFG’s ethical framework.
3.2 Interim Ethical Guidelines
On 7 November 2025, the Norwegian Ministry of Finance established interim ethical guidelines that replaced the previous Guidelines for Observation and Exclusion of Companies from the Government Pension Fund Global. Although the interim guidelines retain the criteria from the previous document, they also constitute a substantial change in the Council’s mandate. The Council’s ability to recommend observation or exclusion has been put on hold.
Instead, the Council will provide information to Norges Bank concerning companies whose activities fall within the scope of the product-based and conduct-based criteria. Norges Bank will then determine whether the companies identified by the Council should be followed up through the regular exercise of its ownership, which includes dialogue with companies, voting at company meetings and, if relevant, the divestment of shares within the Bank’s investment mandate.
The Council will largely continue to apply the same methodological approach as before. This includes portfolio monitoring, information-gathering and engagement with companies. As before, the Council will prioritize companies with the highest risk of involvement with serious breeches of fundamental ethical norms. In cases where the risk is deemed to be unacceptable, the Council will share that information with Norges Bank in the form of risk assessments.
The Council intends to apply the same treshold for submitting such risk assesments as previously used for recommending observation or exclusion. In accordance with the guidelines, the Council’s risk assessments will not be published. Recommendations to discontinue observation or revoke a company’s exclusion will, however, be published on the Council’s website, as before.
A government-appointed committee has been established to review the GPFG’s ethical framework. The committee is due to submit its report by 15 October 2026. The Ministry of Finance has indicated that it will submit the committee’s report for public consultation. The matter will then be presented to the Storting.
3.3 Revisions of the Guidelines, 2015–2025
The Guidelines for Observation and Exclusion of Companies from the Government Pension Fund Global have undergone two major revisions in the period 2015–2025. Both revisions have impacted the Council’s work and have expanded the grounds for exclusion from investment by the GPFG. The changes must be seen in the context of both political priorities and developments in international norms for responsible business conduct.
In 2016, a product-based coal criterion and a conduct-based climate criterion were introduced. With respect to the coal criterion, Norges Bank was permitted to exclude companies without any prior recommendation from the Council on Ethics. Initially, the criterion covered coal companies and power generators which based more than 30 per cent of their businesses on thermal coal. As of 2019, absolute threshold values were also introduced. This meant that companies with a substantial coal-based operation could be excluded even though their share of the overall business came to less than 30 per cent. The coal criterion has resulted in the largest number of exclusions from the GPFG. At the close of 2025, 65 companies had been excluded on these grounds. The Council has played no part in these exclusions.
With respect to the conduct-based climate criterion, the Council initially had sole responsibility for identifying relevant companies. Since 2022, Norges Bank was permitted to exclude companies under this criterion without any recommendation from the Council. Since then, the Council has not dealt with the climate criterion.
The second and most comprehensive revision of the guidelines took place in 2021. The majority of the changes built on the Official Norwegian Report NOU 2020:7 Values and Responsibility.
Firstly, a new conduct-based criterion was introduced which allowed for the exclusion of companies that sell weapons to states engaged in armed conflicts, that use the weapons in ways that constitute serious and systematic violations of the international rules on the conduct of hostilities. At the same time, the corruption criterion was expanded to include other serious financial crime, including money laundering.
Secondly, a new product-based criterion covering the production of cannabis for recreational purposes was introduced. In addition, it was specified that the product-based weapons criterion should also cover the production of nuclear weapons delivery systems, which the Council had not previously considered to provide sufficient grounds for exclusion. In practice, this meant that companies making submarines capable of carrying nuclear weapon would be excluded.
Guidance was also given which, in total, led to a modest expansion of the guidelines’ scope. Among other things, greater emphasis was placed on companies’ willingness to share information about their business operations, particularly when they operate in high-risk areas and where opportunities to gather information through other channels are limited. Furthermore, companies’ accountability, pursuant to the guidelines, was slightly expanded through a discussion of situations in which companies may be deemed to contribute to norm violations for which other actors are directly responsible.
The main elements of the guidelines were nevertheless retained. It was established that the guidelines for exclusion and observation should stand on their own; neither the criteria nor the threshold for exclusion should be directly deduced from internationally recognised instruments such as the OECD’s Guidelines for Multinational Enterprises or the UN’s Guiding Principles on Business and Human Rights. It was still understood that the ethical assessments would continue to be performed independently of financial or political considerations. Furthermore, transparency with respect to the ethical assessments was maintained in that both Norges Bank’s decisions and the Council’s recommendations were to be published.
3.4 Outcome of the Council’s Work
From 2015 up to and including 2025, Norges Bank has excluded 88 companies from investment by the GPFG at the recommendation of the Council on Ethics. Of these, 13 were excluded as a result of the changes in the guidelines. The exclusions are distributed among all the criteria and involve companies from 22 countries. The business activities that formed the grounds for exclusion are located in 21 countries across all continents.
During the same period, Norges Bank has placed 23 companies under observation following a recommendation by the Council to either exclude or observe. Of these, the Council has directly recommended the observation of 16 companies, while Norges Bank has decided to place under observation seven companies whose exclusion the Council had recommended. The observation period is normally set at four years but may also have a different duration.
Norges Bank has also decided to follow up ten companies through engagement, on the basis of the Council’s recommendation to either exclude or observe. The Council is not permitted to recommend engagement as a course of action.
Every year, the Council reviews the excluded companies and recommends that exclusion be revoked if the grounds for exclusion have ceased to exist and there are no other circumstances to indicate that the companies should remain excluded. During the period, 20 companies have had their exclusion revoked, while the observation of 12 companies has been discontinued. Two of the observations ended with the companies concerned being excluded, while the other companies were removed from the observation list because the risk of serious norm violations was no longer deemed to be unacceptable.
3.5 Access to Information
The Council makes use of several information services to identify matters associated with GPFG-invested companies which fall within the scope of the guidelines. Such information services have been substantially expanded during the period. Information in multiple languages is picked up, and many databases cover more companies than before. Information “travels” more easily into the Council’s portfolio monitoring systems from media articles and NGO reports.
It is not clear, however, whether the underlying information is more extensive or of a higher quality than it used to be. In some places, the Council perceives press freedom to have become more restricted during the period. Elsewhere, journalists, consultants and NGOs conducting investigations are facing greater threats to their personal safety. In the past decade, the Council has commissioned a number of consultancy assignments to investigate, among other things, working conditions at GPFG-invested companies. Lately, the political context has sometimes limited the Council’s ability to carry out such investigations. At the same time, the emergence of social media, where everyone can be their own publisher, has given better access to information. The challenge in using such sources is that the information is not vetted by reputable media outlets.
The emergence of artificial intelligence may also have a major impact on access to information. On the one hand, it will become easier to gather and compile information. On the other, such information may be more easily manipulated. The need to verify sources and data will therefore be more important than before.
3.6 Dialogue with Companies
During the period, the Council has assessed over 1,000 cases and has, on average, been in contact with around 60 companies a year. The ethical guidelines required the Council to give those companies under assessment the opportunity to present information and views early in the process, and to clarify which matters could form the grounds for observation or exclusion. Every company on track to be excluded or placed under observation under the conduct-based criteria was also entitled to receive a draft of the recommendation for comment.
During this period, the Council has met with around 125 companies, in most cases at the initiative of the companies themselves. The purpose of these meetings has been to gather relevant information to assess whether a company should be excluded under the guidelines. The meetings have also provided insight into how companies work to act responsibly and reduce risks across different areas.
Although it is important that companies have strategies and guidelines to prevent norm violations, such strategies are not, in the Council’s experience, necessarily implemented in practice. The Council has therefore requested more concrete information about risk assessments as well as whistleblowing reports and channels, action plans and the implementation of measures. In the Council’s opinion, solid support at the senior management level is necessary for strategies to actually be implemented and create lasting results. A further crucial factor is that the operational levels feel a sense of ownership of the processes, and that development and follow-up of guidelines are not solely based on contributions from external consultants.
Despite a slight easing of regulatory requirements with respect to companies’ social responsibility in recent years, the Council notes that companies still wish to disclose how they fulfil their responsibilities. The Council has the impression that the norm developments that were introduced with the UN’s Guiding Principles on Business and Human Rights in 2011 have led to greater awareness and a greater understanding of how companies should behave globally. This has also given companies and investors a common ethical platform and a “language” with which to communicate about such topics. In this area, conditions have changed considerably since the Council commenced its work.
3.7 Procedures and Challenges
According to the product-based criteria, all companies which produce certain types of weapons, tobacco and cannabis should be excluded from investment by the GPFG. The Council has therefore given priority to such cases.
Up until 2021, the main challenge with the product-based criteria was to determine what should be defined as key components of nuclear weapons. Such weapons consist of hundreds of components which are all necessary and tailored for this use. To exclude producers of all such components would be far-reaching and would, in practice, be very difficult to accomplish. For this reason, in 2017, the Council engaged a nuclear weapons expert to provide specialised advice on this issue. The case that was particularly highlighted was that of nuclear weapons delivery platforms. This case was later discussed by the Mestad Committee and subsequently became a matter for political consideration.
For the tobacco and cannabis criterion, there were no comparable challenges with respect to their interpretation. Here, the challenge has primarily been to identify all companies that produce such products. The GPFG is invested in far more companies than most other investment funds with ethical criteria. It is therefore not obvious that the screening providers which the Council uses to identify such companies covers the entire portfolio.
Following the introduction of the conduct-based criteria, the guidelines opened the possibility that companies could be excluded, but this was not required, as it was for the product-based criteria. This was due both to the fact that engagement was the preferred course of action and to the fact that identifying and assessing every single company that could potentially be encompassed by the criteria was unrealistic.
Changes in the composition of the portfolio and the global situation have been the greatest challenges facing the Council during the period. In 2015, companies domiciled in certain Gulf States entered the GPFG. Some time later, new share classes from China were included in the reference index. Access to information in these new markets was limited, at the same time as the GPFG was exposed to greater ethical risk, for example risks related to forced labour. The Council has devoted considerable resources to gathering relevant information about companies in these markets.
In addition, the geopolitical situation has influenced the Council’s focus. Cases relating to situations of war and conflict have constituted a growing proportion of the Council’s efforts. The Council has surveyed companies’ activities connected to conflict areas and assessed whether their ties to international law violations qualify for exclusion under the guidelines. Companies with ties to the conflicts in Myanmar, the West Bank, Sudan and Ukraine account for almost a quarter of the decisions to exclude or observe that have been taken during the period.
Labour rights abuses have been the topic for almost as large a proportion of the Council’s recommendations. Since companies have direct responsibility for working conditions in their own operations, this is a natural focal point for the work. Poor working conditions are not unusual and are often a socially accepted practice. Such human rights abuses are therefore often not picked up on by the media. In many cases, the Council has engaged external consultants to investigate working conditions at factories and plantations where the risk of poor working conditions is high. One challenge is that such investigations cannot always be carried out where conditions are most serious, due to safety concerns. The Council always contacts the companies under investigation but does not restrict itself to investigating only those companies that are willing to share information.
These investigations generally encompass several companies in the same industry or country, so that the findings can be calibrated. The high threshold for exclusion means that not all labour rights abuses qualify for exclusion. The Council focuses on serious and systematic abuses, where the risk of the practice continuing is significant. Most of the companies that are excluded on the grounds of labour rights abuses have demonstrated elements of coercion in the employment relationships, serious harassment of workers, including of a sexual nature, or other working conditions harmful to workers’ health. Several cases relate to migrant workers, who are particularly vulnerable to exploitation, partly because they have often paid high recruitment fees, and because work and residence permits may be tied to the employment relationship.
The Council has dealt with a wide range of issues under the human rights criterion. Examples include companies that displace Indigenous peoples from their territories, and companies that supply surveillance technology that enables serious abuses to take place. There have been cases involving forced relocation, violence against local communities and attacks on refugee reception centres. The Council has also considered cases involving illegal organ trade, serious violence resulting from online hate speech, infringement of freedom of expression, and the arrest of women who become pregnant outside of marriage.
Two main challenges recur in the majority of cases. First, does the Council have access to reliable and verifiable information? Second, is the company’s association with the norm violation sufficiently close to qualify for exclusion under the guidelines? When making these assessments, the Council relies, for instance, on the discussions contained in the Mestad Committee’s report, which explains that “contribution” does not mean legal complicity, but simply “to contribute to”.
The Mestad Committee’s starting point was that the threshold for exclusion should be high and that it should be operationalised through an assessment of the norm violations’ seriousness and the closeness of the companies’ involvement in them. The committee stated that closeness may arise “if a company’s actions or omissions may be said to cause, facilitate or encourage their business associate to commit a norm violation. In connection with particularly serious and foreseeable norm violations, the requirement for closeness may be less stringent.”6 The committee also attached weight to the steps the company has taken to investigate or prevent norm violations, as well the significance of the company’s contribution.
Assessments of companies’ contribution in situations of war or conflict have been particularly challenging. In such cases, a number of companies may, to varying extents, contribute to extremely serious norm violations committed by state actors. In established conflicts, the norm violations are often foreseeable. Based on the directions underpinning the guidelines, the Council has identified some factors which are included in its assessment of companies’ contribution. A key factor is the importance of the company’s activities in enabling the norm violation to take place. The Council also attaches importance to whether those contributions are sporadic or if the company supplies products and services that are specially adapted for use in the conflict situation.
In environment-related cases, assessing whether the environmental damage is sufficiently serious can pose a challenge. For the majority of the companies that have been excluded under the environmental criterion, loss of biodiversity has been a key assessment topic. Business activity is often at the expense of nature, and may be deemed to result in severe environmental damage, even if it is approved or accepted by national authorities.
The Council’s investigations into large, land-intensive projects in tropical rainforests show that even when forest restoration and other mitigating measures are planned, there is considerable scientific uncertainty about whether the ecosystems can be restored in a satisfactory manner. In such situations, the precautionary principle is central. When the affected areas have a high conservation value and the potential for damage is large or long-lasting, the Council may conclude that there is an unacceptable risk of severe environmental damage, also in cases where the activity is considered acceptable within ordinary administrative processes.
Although few companies are excluded or placed under observation pursuant to the guidelines’ section 4(g) on corruption and other serious financial crime, a great deal of work goes on “behind the scenes”. The Council’s first step is to identify companies that are involved in several cases of a certain scope and scale. Then the Council reviews what selected companies have done to prevent new cases. Companies are obliged to have systems to prevent financial crime, and the Council’s assessments generally address how these systems are implemented in practice. This is a resource-intensive and wide-ranging process for each company under review. In such cases, the assessment of future risk is the most difficult aspect.
3.8 The Council’s Experience
The Council considers that the guidelines for observation and exclusion have, generally, worked well in safeguarding the ethical considerations on which there has been political consensus.
Each of the criteria has its distinct challenges, which require professional insight. The vast majority of cases also require significant effort if they are to be assessed properly.
The product-based criteria leave little room for manoeuvre and have resulted in a large number of exclusions which follow almost automatically from the political directions that have been given. There is greater room for discretionary judgement with respect to the conduct-based criteria – both for the Council in its assessment and for Norges Bank in its decision-making.
The reference to international conventions in the preparatory materials for applying the guidelines has served as an important point of reference for the Council’s work, even though these conventions are binding on states and not companies. In some cases, it is relatively easy to assess what these references should imply for the assessment of companies, but not in others.
The salient point in many cases is whether a company must be deemed to contribute to norm violations that other parties are directly responsible for. Here, it has been necessary for the Council to rely on discussions in the guidelines’ preparatory works in order to establish a consistent practice.
Regardless of how guidelines or preparatory works are formulated, situations will always arise which have not been foreseen, and which must be resolved within the established frameworks. It is not reasonable to expect that every question that may arise in connection with companies in which the GPFG is invested will prompt a specific reaction from the GPFG. There must be room for prioritisation, discretionary judgement and practical adjustments.