The Council on Ethics recommends that Cenovus Energy Inc be excluded from investment by the Government Pension Fund Global (GPFG) due to an unacceptable risk that the company is contributing to or is itself responsible for actions or omissions which, at the aggregate company level, lead to an unacceptable level of greenhouse gas emissions.
Cenovus Energy Inc is a Canadian company with a substantial output of oil from oil sand resources in Alberta, Canada. Oil production of this kind results in far higher greenhouse gas emissions than the global average, and the company has no specific plans that would reduce its emissions to this level within a reasonable period of time. The company’s greenhouse gas emissions are not subject to a regulatory regime that is as stringent as the EU ETS, and have a government-imposed cost that is considerably lower than corresponding emissions in the EU.
The Council on Ethics recommended the company’s exclusion for the first time in 2017. This recommendation was among the first issued under the climate criterion, whose application was at that time somewhat unclear. After clarification was obtained from the Norwegian Ministry of Finance in June 2019, the recommendation was reissued that autumn with minor adjustments relating particularly to the type of greenhouse gas emissions regime the company is subject to.
The Council on Ethics submitted its revised recommendation 7 November 2019. Norges Bank published its decision to exclude the company on 12 May 2020.