For the Norwegian Government Pension Fund Global

The role of the Council on Ethics for the Government Pension Fund Global is to evaluate whether or not the Fund’s investment in specified companies is inconsistent with its
Ethical Guidelines.


New recommendations under the corruption criterion

On 5 May 2017, the Council on Ethics issued four recommendations relating to gross corruption and one recommendation relating to serious environmental damage.
Norges Bank decided to place under observation two companies that the Council had recommended be excluded due to their involvement in cases of corruption. Furthermore, Norges Bank decided to exercise shareholder rights with respect to two companies involved in corruption cases, where the Council had recommended observation. Norges Bank decided to abide by the Council’s recommendation to exclude a company on the grounds of its involvement in serious environmental damage.
Decisions regarding observation
In 2016, the Council on Ethics recommended that the companies PetroChina Co Ltd and Leonardo SpA be excluded from the Government Pension Fund Global (GPFG) due to the risk of gross corruption. However, Norges Bank has instead decided to place these companies under observation. During the observation period, the length of which has not been stipulated, the Council will follow up these companies with respect to the risk of corruption. The Council normally provides Norges Bank with an annual report on the companies under observation. The Council may also issue a new recommendation to exclude a company while it is under observation.
According to the guidelines, Norges Bank must make an independent assessment of the cases concerned, and assess measures other than those recommended by the Council on Ethics (ss 6(2) and 6(3)).
Section 6(4) of the guidelines states that “Observation may be decided when there is doubt as to whether the conditions for exclusion are met or as to future developments, or where observation is deemed appropriate for other reasons”.
All the companies that the Council on Ethics assesses under the corruption criterion have been involved in serious corruption cases. The crux of the matter in such cases is whether the company has done enough to avoid becoming involved in corruption once again. In general, this is a difficult judgement to make. In its 2016 annual report, the Council discusses its assessment of corruption risk in more detail.
Decisions regarding the exercise of shareholder rights
The Council on Ethics also recommended that the companies Eni SpA and Saipem SpA be placed under observation. However, Norges Bank has decided to ask Norges Bank Investment Management (NBIM) to discuss the risk of gross corruption with these companies. Section 6(3) of the guidelines states that “Before making a decision on observation and exclusion in accordance with section 6(1), the Bank shall consider whether other measures, including the exercise of ownership rights, may be more suited to reduce the risk of continued norm violations, or whether such alternative measures may be more appropriate for other reasons”.
Although the Council perceives the exercise of shareholder rights and observation to be extremely similar measures, it cannot recommend the exercise of shareholder rights. This is primarily because NBIM is responsible for the exercise of shareholder rights, while the Council on Ethics is responsible for observation.


The Annual Report for 2016 is now available:


Some excerpts from the Annual Report are available as separate pdf files:

The Council’s activities

Norges Bank manages the Fund and makes decisions to exclude companies from the Fund’s portfolio based on advice from the Council. The Council’s recommendations will be made public on this website.

Norges Bank provides a list of companies excluded from the Fund’s portfolio.

The Council’s secretariat prepares the cases for the Council.

Frequently Asked Questions

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