Norges Bank’s executive board has excluded five companies from the Government Pension Fund Global (GPFG) after an assessment against the product-based coal criteria.

The companies excluded from the fund were Sasol Ltd, RWE AG, Glencore PLC, AGL Energy Ltd, and Anglo American PLC.

The bank has also placed a further four companies on an observation list: BHP Group, Vista Energy Group, Enel SpA and Uniper SE.

The exclusions are based on a “new absolute threshold” for coal companies that were added to guidelines for the fund last year, following the Norwegian parliament’s discussion of White Paper 20.

Whilst the amendments took effect from 1 September 2019, this is the first time that the thresholds in the coal criterion have actually been applied.

The group clarified that, for several of the firms of which exclusion is now public, the market situation, and the liquidity of individual shares in particular, had caused a delay in selling the shares “in a reasonable manner”.

Decisions around both exclusion and observation were made by the executive board following recommendations from Norges Bank investment management (NBIM).

NBIM stated that the work it had already undertaken after the coal criteria entered into force in 2016 had prepared it well in order to manage the requirements related to these new absolute thresholds.

It explained that much of the data and analysis required to identify companies impacted by the threshold was “to a great extent” already available when the criterion entered into force.

However, the bank highlighted that product-based coal criteria was different from others, in that "the bank has been given the task of identifying companies and preparing the grounds for decision".

It emphasised that the criteria saw importance given to “forward-looking investments”, including any plans that the company may have that to change the level of extraction of coal, and/or increase the income ratio of business share relating to renewable sources.

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