The Norwegian central bank (Norges Bank) has, as the first in the world, excluded 52 companies from its Government Pension Fund based on the companies inexpedient use of coal in their business activities. Philippine Aboitiz Power (AP) and 7 Chinese and 2 Hong Kong companies was hit by the exclusion.
The decision to exclude companies that doesn’t live up to the ethical guidelines determined by the Council on Ethics for the Government Pension Fund. 120 companies are right now listed for reasons as corruption, violations on human rights, production of tobacco, nuclear weapons etc.
“Norges Bank has decided to exclude 52 companies from the Government Pension Fund Global after an assessment of the new product-based coal criterion. The exclusions follow a first round of analysis by Norges Bank Investment Management. Further exclusions will follow in 2016,” Norwegian bank said in a press release.
The Norway Ministry of Finance introduced a new product-related criterion under the Guidelines for observation and exclusion from the Government Pension Fund effective February 1, which now has put 52 more companies on the list including the 10 SEA-companies.
“Where thermal coal is a significant part of a company’s business activities, the company may be excluded from the fund. The new criterion states that coal power companies and mining companies who themselves, or through other operations they control, base 30 percent or more of their activities on coal, and/or derive 30 percent of their revenues from coal, may be excluded from the GPFG.
“Coal in this case refers to thermal coal,” the bank said.
“In the process of considering recommendations for exclusion or observation of companies that breach the thresholds above, emphasis should also be given to the forward looking product/fuel mix transition as well as the degree to which the company utilizes renewable energy in its activities,” it said.
Aboitiz Power (AP) commented on the exclusion to Manila Times:
“AP was on the initial list of NBIM dated April 14, 2016. According to NBIM, they will continue their research to identify companies that may be excluded according to the product-based coal criterion. The intention is to assess the remainder of relevant companies in the portfolio by the end of 2016,” AP told Manila Times in an email.
“NBIM has already divested all its holdings in AP in the first quarter of 2016,” energy company said.