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Company Response

10 Mar 2023

Norges Bank Investment Management response to Justice for Myanmar report

Norges Bank Investment Management (NBIM) manages the Norwegian Government Pension Fund Global. Our mission is to safeguard and build financial wealth for future generations. Responsible investment is part of our mandate. As a responsible investor, we formulate expectations on how companies should approach their potential impacts on the environment and society. These are based on international principles and standards, such the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises. We actively exercise our ownership rights through engagement and voting.

Human rights is a strategic focus area for NBIM. In our expectations on human rights, we make it clear that we expect companies to respect human rights, to identify potential and actual human rights impacts, and to take actions to avoid and mitigate human rights violations.

In conflict-affected areas, such as Myanmar, the risks of human rights violations are especially heightened, which is why we expect companies to enhance their human rights management efforts in these settings. In December 2022, we updated our human rights expectations wherein we strengthened our expectations to companies in high-risk environments. We included wording with examples of enhanced due diligence, such as analysing conflict dynamics, conducting human rights impact assessments, and mapping out and engaging proactively with a comprehensive group of stakeholders.

Based on our expectations, we have since 2020 engaged in a thematic dialogue with companies with activities or business connections in conflict-affected areas. To date, we have identified and engaged with more than 20 companies on this topic, including with companies operating in Myanmar. These engagements are guided by topic-specific engagement goals against which the companies’ progress and engagement outcomes are evaluated. We note that some companies have withdrawn from Myanmar, and we continue our dialogue with several other companies. Further details about this and other thematic engagements can be located in our 2022 Responsible Investment report.

In addition, as part of our ongoing due diligence processes to identify companies that may have adverse impacts on the environment and society, we monitor our portfolio for ESG-related incidents daily. Incidents relating to companies with operations in Myanmar have appeared on these screens, and this in turn has bearing on our priorities and decisions to engage. Our sustainability due diligence processes are described in the 2022 Responsible Investment report.

Parallel to our ownership activities, the independent Council on Ethics has been working on this topic. The Council is responsible for monitoring and making recommendations on the observation and exclusion of companies in NBIM’s portfolio based on ethical criteria in the Guidelines for Observation and Exclusion of companies from the fund, which are set by the Norwegian Ministry of Finance.  For example, in 2023, Bharat Electronics Ltd and AviChina Industry & Technology Co are companies that have been excluded from NBIM’s investment universe due to “the unacceptable risk that the companies are selling weapons to a state that uses these weapons in ways that constitute serious and systematic breaches of the international rules on the conduct of hostilities” as a result of their association to the Myanmar junta. Similarly, in 2022, PTT PCL and PTT Oil and Retail Business PLC were excluded on the basis of “unacceptable risk that the companies contribute to serious violations of individuals’ rights in situations of war or conflict” due to their involvement in Myanmar.

Note: Per our public holding data, we are not invested in Destini Group.