Responsible Investments: On additional exclusions, and thinking for ourselves

Just like our present guidelines, our guidelines back then precluded investment in companies excluded by the Norwegian Bank Investment Management (NBIM) Council on Ethics. In addition, our guidelines stipulated that we could exclude companies at our own discretion, based on the general principles in our guidelines (which in turn were based on the NBIM guidelines).

The first company to be individually excluded was Kongsberg Gruppen, which technically was not excluded by NBIM due to the simple fact that it was a Norwegian company and thus outside of the NBIM investment universe. Later, the Swedish defence company Saab and the US engineering company Fluor Corporation were similarly excluded (Fluor Corp. was later excluded by NBIM). In 2020, we put the American company Heico Corporation on our watchlist, only to redefine the company as excluded shortly thereafter.

The common denominator here is weapons. Our guidelines state that we shall not invest in companies which themselves or through entities they control produce weapons that, in normal use, violate basic humanitarian principles, or sell weapons or military equipment to states subject to sanctions that Norway supports.

With these companies duly inducted into our own little list of additional exclusions, and with those exclusions communicated and explained time and time again, both internally and externally, they came to be taken for granted. A fact of life in our daily business. They weren’t really questioned.

Sometimes, it takes extraordinary events to shake up beliefs and attitudes. One such event was the Russian invasion into Ukraine in February 2022. Slowly, especially after the realisation grew in Western Europe that we would have to strengthen our defences, attitudes towards defence companies started to change. We got an increasing number of questions about why we had excluded these companies, especially domestic defence giant Kongsberg.

Now, we certainly didn’t feel like relaxing our restrictions just because clients question them or ask us to loosen up – on the contrary, we got very good at defending our decisions. But it got us thinking.