Storebrand's Exclusion policy
Storebrand's Exclusion policy is based on the assumption that the companies which contribute to solving societal problems in a sustainable way, will also be the most profitable in the long term.
Storebrand's Exclusion policy
Browse the main areas related to Storebrand's Exclusion policy.
About Storebrand's Exclusion policy
Our process
In evaluating a potential violation of Storebrand's Exclusion policy, one fundamental aspect is the link between the company's operations and the violation. Other factors, such as the number of incidents and the number of people affected, are also central to the analysis. The risk of recurrence is a key consideration. Storebrand also analyses companies where there is a consistent pattern of violations by main suppliers, project partners or other business partners.
Sustainable Investment
Storebrand works systematically to invest in companies that contribute positively to sustainable development. Our long-term vision for the year 2050 is a world where nine billion people live well, and within the earth’s natural limits.
Our Exclusion policy is based on the assumption that the companies which contribute to solving societal problems in a sustainable way, will also be the most profitable in the long term. Storebrand's Exclusion policy shall help to ensure our clients’ future returns. Established in 2005, Storebrand's Exclusion policy applies to all of Storebrand’s internally managed funds and pension portfolios.
Dialogue
In cases where companies systematically breach our policy, Storebrand will in most cases use its position as an investor to engage companies in dialogue, and seek to achieve improvements.
Storebrand will not engage in a dialogue with companies involved in controversial weapons to try to effect change. Storebrand might contact the company simply to clarify and confirm whether the company is involved or not. If a company is identified as involved in and generate any revenues from controversial weapons, it is excluded.
If dialogue does not lead to positive changes, a company may be excluded from investment. Exclusion is regarded as a last resort in cases where companies fail to demonstrate the will to improve. A company will also be excluded when subsidiaries controlled by the company, typically through ownership of 50 percent or more, are in breach of Storebrand's Exclusion policy.
International law and human rights
Storebrand will not invest in companies that contribute to serious violations of international law. This includes serious humanitarian law violations as well as violations of basic human rights.
Human rights
With regard to human rights, the criterion is based on the main UN human rights conventions and ILO conventions amongst others. Serious breaches include child labour, forced labour, and violations of the right to life and health.
Humanitarian law
With regard to humanitarian law, the criterion is founded on The Hague and Geneva conventions amongst others. Serious breaches include contribution to genocide or direct contribution to military operations in illegally occupied territories.
Corruption and financial crime
Storebrand will not invest in companies that are involved in grand corruption. The criterion is based on the United Nations Convention against Corruption amongst others. Allegations of giving or receiving improper advantages, either in the private or public sector, are analysed. The criterion also covers other serious financial crimes, such as tax evasion, accounting fraud and embezzlement.
Evaluation
In evaluating a potential violation of our policy, important aspects include the number of incidents, the value of the improper payments, and the level of hierarchy involved. The risk of recurrence is a key consideration.
Indications of corruption
Companies in which there are indications of an ongoing culture of corruption or other financial crimes are considered the most risky. This criterion includes gambling operations associated with unsustainable business practices.
Environmental damage
Storebrand will not invest in companies involved in activities that cause serious environmental damage. The criterion is based on The UN Convention on Biological Diversity and The UN Framework Convention on Climate Change amongst others.
Evaluation
In evaluating a potential violation of our policy, important aspects include the extent and reversibility of the damage caused to ecosystems and people's health. The risk of recurrence is a key consideration. The cases considered most serious are those where the company lacks a systematic approach to limiting its environmental impact, thus causing irreversible damage to a large or vulnerable area or group of people.
Criterion
This criterion includes exclusions based on climate risk; including companies with major stakes in coal, coal utilities, oil sand and unsustainable palm oil production.
Controversial weapons
Storebrand will not invest in companies involved in the development and/or production of controversial weapons; testing of controversial weapons; production of components to be used exclusively for controversial weapons; or stockpiling and/or transfer of controversial weapons.
Criterion
This criterion includes but is not limited to: landmines, cluster munitions, nuclear weapons and biological and chemical weapons. The definitions and scope are in line with the corresponding conventions and norms, including but not limited to the Convention on Cluster Munitions (CCM), the Ottawa Treaty/Mine Ban Treaty and the Non-Proliferation Treaty.
Tobacco
Storebrand will not invest in companies where the sale of tobacco products, or components exclusively designed for such products, exceeds 5 percent of total sales.
Criterion
Tobacco products are defined as products entirely or partly made from tobacco leaf. The criterion applies to producers and distributors as well as companies involved in the cultivating or processing of tobacco.
Cannabis
Storebrand will not invest in companies where the sale of cannabis products for recreational use, or components exclusively designed for such products, exceeds 5 percent of total sales.
Criterion
The criterion applies to producers and distributors as well as companies involved in the cultivating or processing of cannabis for recreational use. The criterion does not apply to income from cannabis products that are not classified as recreational.
Sovereign bonds
Storebrand will not invest in sovereign bonds from countries lacking elementary institutions to prevent corruption, fulfil basic social and political rights, and contribute to maintaining international peace and security.
Criterion
Countries that rank among the lowest 10 percent on Transparency International’s “Corruption Perceptions Index” and the World Bank’s “Worldwide Governance Indicators; Control of Corruption Index”, are excluded. Furthermore, countries with the lowest score of 7 in Freedom House’s “Freedom in the World Index”, and countries subject to sanctions imposed by the UN Security Council, are also excluded.
Exchange Traded Funds (ETF)
To be approved, an ETF must meet a 10 percent rule. The rule states that a maximum of 10 percent of an ETF's portfolio companies, or of the index that the ETF follows, may be excluded by Storebrand.
Extra criteria beyond Storebrand's Exclusion policy
Storebrand's extra criteria build upon Storebrand's Exclusion policy. The extra criteria will only apply to selected funds and saving profiles.
1. Extra criteria: Production and distribution of fossil fuels
Storebrand will not invest in companies:
a. which derive more than 5% of their revenue from the production or distribution of fossil fuels as well as relevant services to fossil fuel operations
b. whose fossil reserves exceed 100 million tonnes of CO2
Storebrand/SPP defines 'production and distribution' to include all activities linked to the extraction, refining and transport or distribution of fossil fuels. Companies that manufacture products derived from fossil fuels such as plastic, asphalt or synthetic rubber are not included. Public bodies such as states or local government entities are not within the scope of this criterion. Services are defined as any activity pertaining to the provision of relevant services to fossil fuel operations and other logistical activities relation to it. These include transportation, shipping and storage of fossil fuels.
The following corporate activities are considered breaches of this criterion. If a company derives more than 5% of its revenue from one and/or several of these activities, the company will be excluded.
Extraction
- Drilling oil and gas wells
- Support activities for oil and gas operations
- Tar sands extraction
- Bituminous coal and lignite surface mining
- Natural gas liquid extraction
- Crude petroleum and natural gas extraction
- Bituminous coal underground mining
- Mining and oil and gas field machinery manufacturing
Refining
- Petroleum refineries
Transport and distribution
- Gasoline stations
- Natural gas distribution
- Petroleum power generation
- Coal power generation
- Natural gas power generation
- Pipeline transportation
The threshold of 100 million tonnes of CO2 in fossil reserves was chosen because companies with larger reserves will be the most affected by the implementation of the Paris Agreement. If a two-degree target is to be achieved, large reserves of fossil fuels will have to remain in the ground, so-called 'stranded assets'.
*Data Sources
2. Extra criteria: Alcohol, adult entertainment, arms and gambling
Alcohol
Storebrand will not invest in companies that derive more than 5% of their revenue from the production of alcoholic beverages or ingredients used only in alcoholic beverages. In addition, Storebrand will not invest in companies that derive more than 5% of their revenue from the distribution of alcoholic beverages.
Adult entertainment
Storebrand will not invest in companies that derive more than 5% of their revenue from the production or distribution of adult entertainment.
Arms
Storebrand will not invest in companies that derive more than 5% of their revenue from the production or distribution of arms, whether private or public. The criteria also includes the sale of products and services tailored to (support) arms, as well as, products and services that are not arms-related but tailor-made for the defence industry or the military.
Gambling
Storebrand will not invest in companies that derive more than 5% of their revenue from gambling business activities. The criteria also includes the sale of equipment and services tailored to such business activities.
3. Extra criteria: Market-oriented screening beyond Storebrand's Exclusion policy
In certain markets, industry standards for exclusion based on international norms and conventions, product screening and unacceptable operations may be even stricter than Storebrand's Exclusion policy. In these cases, further screening is carried out to ensure compliance with industry practices. Companies that are in violation of these standards/practices shall not be invested in.
4. Extra criteria: Green bonds
The following exclusion criteria apply to the purchase of green bonds beyond Storebrand's Exclusion policy.
The funds shall not buy bonds from issuers that:
- Do not fulfil the requirements set out in the extra criteria: "Alcohol, Adult entertainment, Arms and Gambling."
- Do not fulfil the requirements set out in the extra criteria: "Market-Oriented screening beyond the Storebrand Standard."
- Are companies classified according to the Global Industry Classification Standard (GICS) Sector 10, Energy
- Derive a maximum of 50% of their revenue from fossil fuel production according to the Trucost definition given above.
- Have more than 100 million tonnes of CO2 in fossil reserves
Furthermore, Storebrand will not invest in companies that are excluded from the Norwegian Government Pension Fund Global by Norges Bank (Norway's Central Bank) , where the exclusion principle is in line with Storebrand's Exclusion policy.
Approved by the Board of directors of Storebrand ASA October 2005.
Last revised: 9 November 2020