2 The work under the various criteria

2.1 Product-based criteria

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.

In 2024, the Council issued recommendations to exclude two companies which serve as the lead contractors for the construction of strategic submarines, i.e. submarines built primarily as launch platforms for nuclear missiles. In connection with the changes in the ethical guidelines adopted in 2021, it was determined that launch platforms for nuclear weapons are deemed to constitute key components of such weapons and therefore fall within the weapons criterion.

The day-to-day work on the product-based criteria involves making decisions with respect to cases that emerge via the portfolio monitoring process. In 2024, the Council issued recommendations to exclude two companies due to their production of tobacco-products. A recommendation was also issued to revoke the exclusion of a company which is no longer involved in the production of tobacco-products.

With regard to the coal criterion, Norges Bank is authorised to make decisions concerning the observation or exclusion of companies without a recommendation from the Council on Ethics. 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 consultant charged with monitoring the portfolio with respect to the product-based criteria nevertheless reports to the Council on companies which may fall within the scope of this criterion. The Council shares all relevant information with the Bank.

2.2 Human rights, rights of individuals in situations of war and conflict

Section 4 of the guidelines states that «Companies may be excluded or placed under observation if there is an unacceptable risk that the company contributes to or is responsible for:

• a. serious or systematic human rights violations
• b. serious violations of the rights of individuals in situations of war or conflict […]».

Serious or systematic human rights violations

In 2024, the work under this criterion has largely focused on labour rights in addition to violence perpetrated by security guards, the rights of indigenous peoples, forced relocation and human rights abuses to which technology companies may contribute. In 2024, the Council recommended that three companies be excluded, and one placed under observation in relation to this criterion. The Council also recommended that observation of two companies be terminated.

On the basis of cases identified via the portfolio monitoring process, previous sectoral studies and input from civil society organisations, we have investigated working conditions at companies in 11 countries located in Africa, the Middle East, Asia and Europe. The norm violations have ranged from the gross sexual harassment of women, excessive and unpaid overtime, poor staff accommodation, a lack of employment contracts and employment conditions that exploit people in vulnerable situations. Experience shows that such labour rights violations are not necessarily related to geographical location, although the risk is probably higher in some regions than others.

The Council will continue to emphasise labour rights in 2025. For example, a framework agreement has been entered into with a consultant who will investigate working conditions at shoe manufacturers in which the GPFG is invested. These investigations will include factory inspections, if the companies cooperate, and interviews with employees. The shoe manufacturers’ factories are located primarily in Asia.

Migrant workers are especially vulnerable to exploitation in the labour market because their work and residence permits are often tied to a particular employer. Since little information on the situation for migrant workers is publicly available, the Council performs its own investigations where possible. In 2024, the Council commissioned consultants to survey business sectors and companies with many migrant workers in Taiwan. In 2025, we will examine some of these companies in greater depth. In addition to working conditions, recruitment fees will be an important topic in the further investigation of these companies.

In some countries, investigations into working conditions pose a considerable risk for consultants and those who provide them with information. In such cases, the Council must rely on publicly available information and base its decisions on risk assessments of countries and business sectors, as described in the Report to the Storting (White Paper) on the Government Pension Fund 2021 (Meld. St. 24 (20–21)). In 2024, the Council followed up reports of forced labour at companies with operations in the Gulf States and China. For security reasons, the Council does not perform physical investigations in these countries.

The Council receives many reports of the rights of indigenous peoples being infringed. Several of these cases also have an environmental aspect. Indigenous people traditionally live close to nature and major changes in the natural environment in areas in which they live impinge on their land rights and livelihoods. A combination of inadequate consultation, ignorance and poor management of these processes on the part of the companies involved often contribute to serious norm violations. Many of these cases are linked to the transition to renewable energy sources and the extraction of critically important minerals. The Council prioritises cases that affect particularly vulnerable indigenous groups and those where indigenous people’s lives and livelihoods are threatened.

The GPFG invests in a number of different technology companies, including those which supply social media platforms and online retail outlets, as well as companies which have platforms offering various delivery services. The portfolio monitoring process regularly identifies reports of human rights violations at such companies. In 2024, the Council had several technology companies under assessment.

Serious violation of the rights of individuals in situations of war or conflict

Full-scale wars and armed conflicts are ongoing in many parts of the world. Some of these conflicts stand out because a significant number of companies are associated with them in various ways. This is particularly true of the areas that Israel occupies in the West Bank, which are fully integrated in the Israeli economy. The Council assessed some 65 companies under this criterion in 2024. Almost all of these companies were assessed on the basis of their links to the West Bank and Gaza. This work is described in greater detail in a separate article. In 2024, the Council recommended the exclusion of two companies on the basis of their business activities in the West Bank.

The Council is also still closely monitoring GPFG-invested companies with operations in Myanmar. Reports published by the UN High Commissioner for Human Rights continued to document abuses perpetrated by the armed forces on the country’s civilian population. The High Commissioner has repeatedly urged businesses with operations in Myanmar not to cooperate with companies controlled by the armed forces and to avoid business activities that help to strengthen the armed forces’ financial position.

Two companies were placed under observation in 2023 on the basis of their partnership with a state-owned telecoms company in Myanmar. The Council will assess the risk that these companies are contributing to serious human rights violations enabled by surveillance of the telecoms network. The Council communicated with the companies concerned in 2024 and will continue to engage them in dialogue in 2025. In November 2023, the Council recommended the exclusion of one company that had been under observation since 2022 due to its operations in Myanmar. That recommendation was published in 2024.

The Council is also continuing to monitor GPFG-invested companies which contribute to Russia’s war of aggression against Ukraine. These cases are assessed under the criteria relating to weapons sales and other serious violations of fundamental ethical norms. Since it has been decided that all Russian companies shall be divested from the GPFG’s portfolio whenever practically possible, the Council does not follow up on Russian companies. The companies which the Council has assessed in 2024 are therefore domiciled in other countries.

2.3 Companies’ sales of weapons to certain states

Section 4 of the guidelines states that «Companies may be excluded or placed under observation if there is an unacceptable risk that the company contributes to or is responsible for: […]

• c. 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
• d. the sale of weapons or military materiel to states that are subject to investment restrictions on government bonds as described in section 2-1(2)(c) of the Management mandate for the Government Pension Fund Global […]»

Sections 4(c) and 4(d) both apply to companies’ sales of weapons to certain states. A total of nine companies were under assessment in relation to these criteria in 2024.

Pursuant to section 4(c), companies may be excluded if there is an unacceptable risk that they are selling weapons to states that use them in violation of humanitarian law. This criterion was introduced in 2021. The provision’s wording makes it clear that it applies to violations of humanitarian law that are both serious and systematic. The preparatory work states that the criterion shall apply to weapons that may impact civilians in particular. In other words, the criterion does not open the way for a general exclusion of companies that sell weapons to states that violate humanitarian law in an armed conflict. The Council is also required to base its assessment on a broad pool of information and reports from authoritative institutions, which show that the weapons are consistently being used in ways that contravene international rules on the conduct of hostilities. The criterion has been applied to companies that sell weapons to the Myanmar authorities. In 2024, the Council further assessed whether companies’ sales of weapons to Israel may constitute grounds for exclusion. This is explained in greater detail in a separate article.

The so-called government bond exception is included in the GPFG’s mandate. The objective is to preclude the GPFG from investing in government bonds issued by states that are subject to extensive international sanctions that are also endorsed by Norway. The Ministry of Finance decides which countries the provision should be applied to – currently North Korea, Syria, Russia and Belarus. Section 4(d) of the guidelines warrants the exclusion of companies which sell weapons to states encompassed by the government-bond exception. It applies to the sale of all weapons and all military materiel and therefore has a far wider scope than section 4(c). Pursuant to section 4(d), moreover, it is not required than any assessment be made of how the weapons are used; it is not even presumed that the weapons will be used at all, since the purchasing states are not necessarily belligerent. At the Council’s recommendation, one company was excluded from investment by the GPFG in 2024, pursuant to section 4(d) of the ethical guidelines. This was a Chinese company which supplies engines to Russian and Belorussian military vehicles.

2.4 Environment and climate

Section 4 of the guidelines states that «Companies may be excluded or placed under observation if there is an unacceptable risk that the company contributes to or is responsible for: […]

• e. severe environmental damage
• f. acts or omissions that on an aggregate company level lead to unacceptable greenhouse gas emissions […]»

Severe environmental damage

In 2024, the Council examined around 60 cases under the environment criterion. Around a quarter of these cases related to the loss of biodiversity. Various types of industrial pollution have also been an important topic, as has beaching , a process whereby ships are run up onto beaches in Bangladesh and India, and broken up for scrap. These are issues that the Council has worked on previously.

In recent years, companies with business operations that impact nature have seen a development in the norms governing acceptable practices. As a result of this development, the Council has raised its expectations with respect to the due diligence exercised by companies operating in areas designated as important for biodiversity. The Council’s work on cases relating to biodiversity is described in a separate article in this annual report.

The Council has also reinforced its endeavours with respect to companies which risk of harming vulnerable ecosystems and causing biodiversity loss, through deforestation or resource extraction, for example. In 2024, the Council recommended the exclusion of three companies under the environment criterion, in connection with two separate cases. In both cases, the basis for exclusion was the risk that areas of high natural value will be lost. The Council has also submitted a report to Norges Bank on a company that is under observation due to the risk of deforestation resulting from the company’s operations.

In several of the cases assessed under the environment criterion in 2024, empirical knowledge about the area’s biodiversity – what species there are, population sizes and ecosystems – is incomplete. Although companies often possess such information, they do not always wish to share it with the Council. This can make it difficult to assess the impact of the companies’ activities. In cases assessed by the Council in 2024, it has been presumed that deforestation of large swathes of intact tropical forest and activities which help to impoverish and diminish the size of habitats for critically endangered species constitute a significant risk that important biodiversity will be lost.

In 2024, the Council commissioned a report by a third-party consultant to obtain a better overview of GPFG-invested companies which operate in environments designated as being of high conservation value. The objective was to identify companies in the GPFG’s portfolio that operate in biodiversity hotspots . These are biogeographical regions characterised by an exceptionally rich biodiversity, where less than 30 per cent of the original area retains intact areas of nature and habitats. The consultant’s study identified seven GPFG-invested companies as relevant for further investigation.

Cases relating to serious pollution are constantly being identified by the portfolio monitoring process. The Council regularly commissions consultants to help it gain an overview of serious pollution linked to companies in the GPFG’s portfolio. In 2021, a third-party survey of companies operating particularly polluting gold mines was commissioned. In 2024, the Council assessed the final two of the 11 companies which the study found to cause high levels of pollution and pose a risk of serious environmental damage. In both cases, the Council terminated its assessments because there was insufficient documentation to substantiate the allegations of serious pollution.

In 2024, the Council investigated several other cases relating to pollution caused by industrial activity, mining, oil extraction and refining. It can be difficult to distinguish between companies, particularly when they are located in industrial clusters where many contribute to the elevated pollution levels. In such cases, impacts on the local population’s health are often better documented or more widely reported than the damage to the environment. The Council will continue to investigate companies with emissions which may constitute a high risk to people and the environment, but a lack of data is often a challenge in such cases.

Perfluoroalkyl and polyfluoroalkyl substances (PFAS), also known as forever chemicals , are a large group of synthetic chemical compounds. They are water, stain and grease-resistant, and have countless applications in everyday life. However, they also have major environmental and health impacts, not least because they are extremely slow to degrade in nature and in the human body. Knowledge about their adverse environmental and health impacts has prompted stricter regulation of these substances. Some companies are therefore phasing out the use of PFAS in their production processes. In 2024, the Council commissioned a consultant to discover whether any GPFG-invested companies produce the types of PFAS that are subject to regulation. So far, the survey has identified 15 companies.

Unacceptable greenhouse gas emissions

The Council on Ethics’ guidelines have contained a criterion concerning unacceptable greenhouse gas emissions since 2016. The Council has issued five recommendations to exclude, and a total of four companies have been excluded under this criterion. A change in the guidelines in 2022 permitted Norges Bank to exclude companies under this criterion at its own initiative, without a recommendation having previously been issued by the Council on Ethics. In practice, therefore, Norges Bank has assumed primary responsibility for the climate criterion. For a period going forward, the Council will follow up the companies that have already been excluded but will not normally assess new companies under the climate criterion.

2.5 Gross corruption and other serious financial crime

Section 4 of the guidelines states that «Companies may be excluded or placed under observation if there is an unacceptable risk that the company contributes to or is responsible for: […]

• g. gross corruption or other serious financial crime […]»

Gross corruption

In 2024, the Council issued recommendations to exclude two companies, terminate the observation of one company and extend the observation of another. In addition, the observation of one company was paused until further notice, since the GPFG currently has no investments in it.

The Council monitors allegations of corruption linked to GPFG-invested companies on an ongoing basis. Companies linked to multiple serious allegations of corruption are systematically logged, sorted by business sector and ranked with respect to level of risk. This overview is constantly updated and expanded. Within certain sectors, allegations concerning such a large number of companies have been identified that it is also possible to perform a more holistic review of them.

In the same way as the Council has previously assessed companies in the oil and gas extraction and construction industries, it launched a review of companies in the water/power/gas supply sector in 2024. ( Utilities in the FTSE). The review encompasses 19 companies that have all been involved in corruption cases. The construction of hydroelectric or gas-fired power plants, or the laying of power lines and gas or water pipes, often involves large contracts, with public authorities heavily involved as client, regulator and licence/permit issuer. The risk of corruption is high when so much is at stake for the individual companies, while decision-making authority is restricted to just a few people. Obtaining access to the water/power/gas supply network, metering consumption etc., may also create a downstream corruption risk, although this is generally on a smaller scale ( petty corruption ).

Within the utilities sector, wind and solar power has become increasingly important in recent years. In addition to major capital investments, the amount of money to be gained from these types of energy production in the form of public subsidies and the issue of renewable certificates also opens the way for potential rent-seeking behaviour. The industry is, moreover, in a relatively early development phase compared with traditional forms of energy production. As a result, the renewable energy sector is not yet as fully regulated as, for example, the production of oil and gas.

The Council’s review of utilities companies had not been completed by the close of the year. So far, one company in this sector has been selected for more detailed assessment.

In connection with corruption cases, the Council recommends observation more often than in other cases. This is because the norm violations have generally occurred at some distance in the past when they become publicly known, while the companies involved in corruption will often implement changes that sow doubt about developments forward in time.

The Council evaluates how those companies that have been placed under observation are applying and developing their anti-corruption systems. The Council also monitors for the emergence of new allegations of corruption. If no new corruption cases are reported and the company seems to have established an anti-corruption system that aligns with internationally recognised recommendations, the Council normally recommends that observation be terminated. Nevertheless, this does not guarantee that the company will not engage in corruption at some future date. Should it do so, the company’s continued inclusion in the GPFG’s portfolio will be subject to reassessment.

Other serious financial crime

In 2024, the Council has worked primarily with respect to companies operating in the financial sector as well as companies in the property sector. The focus of these assessments has been the companies’ compliance with regulatory requirements relating to money laundering and whether they have had adequate systems and routines to fulfil their obligation to prevent and uncover money laundering. For financial institutions, inadequate systems may be a punishable offence, since they have a statutory duty to take steps to know their customers, monitor customer activity on an ongoing basis, investigate suspicious circumstances and report suspicious transactions. Failures in this area could mean that banks are, under the terms of the ethical guidelines, contributing to the underlying norm violations committed by their customers or employees. The Council has also investigated companies that are accused of actively having facilitated money laundering by accepting or forwarding funds that are the proceeds of crime.

The Council’s starting point is generally a police investigation, criminal conviction or out-of-court settlement that the company has entered into. In such situations, the companies concerned will, as a rule, implement wide-ranging measures to avoid becoming involved in new cases. This is because financial institutions need a licence to operate and may also be ordered to curtail their business activities by relevant financial supervisory authorities.

The Council has therefore focused on companies domiciled or with significant business activity in countries or sectors where there is a heightened risk of money laundering. In this context, South Africa and Nigeria were examined in 2023 and 2024. The Council has also assessed individual companies domiciled in well-regulated markets that have been subject to wide-ranging and repeated legal penalties.

The Council instigates a dialogue with the companies under assessment at an early stage. In this connection, the Council was in contact with five companies in 2024. Dialogue with some companies has been fairly extensive, involving several meetings and the review of a large number of documents. At the close of the year, the assessment of three companies had been completed, while seven remained ongoing at the start of 2025.

So far, the Council has issued no recommendations to exclude companies or place them under observation pursuant to the criterion’s expansion to cover «other serious financial crime» as well. Due to the public authorities’ comprehensive control of the financial sector, it is expected that only a few cases will lead to exclusion or observation. The Council is keeping abreast of specific allegations concerning matters that naturally fall within the scope of this criterion. In line with the guidance provided by the Ethics Commission in its report NOU 2020: 7, the Council is particularly interested in companies that are repeatedly involved in malfeasance. Such incidents are logged on an ongoing basis and are used as the basis for assessing whether the company should be contacted and assessed in greater depth.

2.6 Other particularly serious violations of fundamental ethical norms

Section 4 of the guidelines states that «Companies may be excluded or placed under observation if there is an unacceptable risk that the company contributes to or is responsible for: […]

• h. other particularly serious violations of fundamental ethical norms»

In recent years, there has been an increase in the number of companies assessed under this criterion, which may be applied to cases that do not fit into any of the others. In 2024, the Council worked particularly with cases relating to gross animal welfare violations and companies’ possible contribution to Russia’s war in Ukraine. The Council also followed up one company that is under observation due to the risk that its activities may damage prehistoric and irreplaceable cultural heritage sites. In February 2024, the Council submitted an observation report on this case to Norges Bank.

In 2024, the Council recommended the exclusion of one company which has had long-term links to the Russian defence industry, in part as a supplier of steel. The disclosure that these links continued to exist was sufficient for the Council to consider there to be an unacceptable risk that the company was contributing significantly to Russia’s capacity to wage war in violation of international law. The company is listed on the London Stock Exchange but has the bulk of its business activity in Russia. Since it has been decided at the political level that the GPFG shall divest its shareholdings in Russian companies, there are few such companies for the Council to assess.

In connection with animal welfare cases, the Council assesses companies on the basis of the seriousness of the alleged norm violations, the proximity of the company to them and the likelihood of the company’s practices continuing going forward. Under normal circumstances, therefore, a significant number of individual animals must be subject to cruel and inhumane treatment before the Council will open an assessment. Primarily, the Council examines cases where GPFG-invested companies subject a large number of individual animals to gross welfare violations within their own operations and do not seem to have tangible or credible plans to improve those conditions.