Norway’s $1 trillion wealth fund, the world’s largest, will not yet blacklist firms for producing too much greenhouse gases, as mandated by parliament, because further clarification is needed, the board of the Norwegian central bank said on Wednesday.
The fund is forbidden by parliament from investing in firms that produce nuclear weapons or landmines, or are involved in the production of tobacco, among other criteria.
Carbon emissions became a criteria for exclusion from the fund in 2016 and last year the Council on Ethics, the fund’s ethics watchdog, recommended “a small handful” of firms be excluded for producing too much greenhouse gas emissions in either the oil, cement and steel sectors.
Since then recommendations have been under review by the board of the central bank, which oversees the fund, but a decision has been delayed several times.
On Wednesday, the board said it had discussed the recommendations from the ethics watchdog at a meeting on Oct. 24.
“The Board did not decide on any exclusions of individual companies at this meeting,” Governor Oeystein Olsen and Deputy Governor Egil Matsen said in a letter to the finance ministry dated and published Wednesday.
Among the reasons it cited was that more work was needed to assess the ground for exclusion.
“Compared with other criteria in the (ethics) guidelines, the climate criterion does not provide a very precise definition of what conduct should constitute grounds for a decision to exclude,” said the letter.
“Norges Bank would ask the Ministry of Finance to help clarify whether the primary basis for assessment against the climate criterion is intended to be companies’ emissions.”
Matsen told Reuters in June that the main difficulty in discussions had been to define and limit this new type of criteria based on the companies’ conduct or behaviour, rather than their products.