The chair report

The Council on Ethics operates under ethical guidelines established in 2004 to prevent the Norwegian Government Pension Fund Global (GPFG) from investing in companies posing unacceptable ethical risk. In 2018, the Chair highlighted increasing complexity in applying criteria, particularly for climate change and human rights, due to evolving international standards, shifting regulation and uneven access to information. Dialogue with companies was emphasised as a key mechanism for encouraging behavioural change alongside exclusion.
Members of the council on ethics and the secretariat
The Council comprised five members with expertise in finance, law, human rights and environmental governance, supported by a secretariat of eight specialists. The Secretariat undertook investigations, company engagement and case preparation. This structure enabled independent assessments across a broad range of sectors and geographies, supporting consistent application of the ethical guidelines.

The work of the council on ethics

The Council is an independent advisory body to Norges Bank, assessing companies against product-based and conduct-based exclusion criteria. In 2018, it issued five recommendations for exclusion, two for observation and three for revocation of exclusion. Norges Bank excluded 11 companies and placed two under observation based on Council recommendations. Around 200 companies were assessed during the year, reflecting expanded monitoring and investigative activity.
The council’s work under the human rights criterion

Human rights violations were the most frequently assessed conduct-based criterion. The Council examined labour rights, indigenous peoples’ rights, migrant worker exploitation and freedom of expression. Priority areas included textiles manufacturing in Southeast Asia, migrant labour in Gulf states, child labour in Indian seed production and shipbreaking in South Asia. Investigations identified systemic risks, including forced overtime, unsafe conditions and deceptive recruitment practices. Persistent engagement reduced risk in some cases, while exclusion was recommended where improvement was insufficient.

Working conditions in the textiles and garment industry

Since 2015, the Council has conducted systematic investigations into textile producers operating in high-risk jurisdictions. By 2018, 27 factory investigations covering 17 companies across Cambodia, Vietnam, Bangladesh, Lesotho and Myanmar had been completed. Serious findings included harassment, unsafe heat exposure, illegal wage deductions and restrictions on union activity. Two companies were excluded and three placed under observation. Draft exclusion recommendations were shown to prompt tangible and sustained improvements in several cases.
The council’s work under the environment and climate criteria

The environment criterion continued to generate the highest number of exclusions. In 2018, the Council focused on deforestation, mining and industrial pollution, shipbreaking and activities threatening conservation areas, including UNESCO World Heritage Sites. One exclusion was recommended on conservation grounds. Climate-related work remained challenging; although five exclusions were recommended in 2017–2018, none were finalised pending clarification of the climate criterion. High-emission sectors such as cement and shipping were prioritised for further analysis.

Environmentally harmful fishing

The Council continued long-term assessments of fisheries, focusing on illegal, unreported and unregulated fishing and catches of threatened species. Seven companies were examined, with one exclusion upheld. Findings showed that ethical risk primarily arises through opaque supply chains rather than direct fishing operations. Greater traceability and transparency were identified as essential risk mitigation measures.

The council’s work under the corruption criterion

Corruption assessments required evidence of both gross past corruption and unacceptable future risk. In 2018, the Council reviewed cases across construction, oil and gas, defence, transport and pharmaceuticals. Emphasis was placed on corporate governance, the effectiveness of anti-corruption systems and company cooperation. JBS was excluded due to severe governance failures linked to corruption, demonstrating the importance of board oversight.
Companies’ sales of weapons to parties in armed conflict

The Council assessed whether weapons sales to parties in the Yemen conflict could trigger exclusion under conduct-based criteria. Exclusion would require clear evidence that companies knowingly contributed to serious violations of international humanitarian law. The Council continues to monitor relevant cases.
List of excluded companies by march 2019

By March 2019, 71 companies were excluded and eight were under observation following Council recommendations. Exclusions spanned severe environmental damage, human rights violations, gross corruption, production of prohibited weapons, tobacco and coal-based energy. Exclusions are not permanent and may be revoked if companies demonstrate verifiable and lasting improvements.