Clear expectations towards companies
Today we publish our second annual report on responsible investment of the Government Pension Fund Global. We have clarified our expectations towards companies in 2015.
The report provides a comprehensive review of our work on responsible investment in the management of the fund. Key areas of this work include developing and promoting international standards and principles, expressing expectations towards companies, and being an active owner.
We expect companies to address a broad set of long-term risks in their strategies, investment plans, risk management and reporting. We updated our expectations with regard to children's rights, water management and climate change in 2015, and today we are also publishing our expectations for how companies manage human rights. Monitoring environmental, social and governance risks in the portfolio is an important part of Norges Bank Investment Management's work on responsible investment.
"We aim to quantify the risk in our investments," says Yngve Slyngstad, CEO of Norges Bank Investment Management. "We expect companies to report on how their operations impact their surroundings and on factors that could affect their profitability in the long term."
We use our voting rights to safeguard the fund's investments. This includes voting to promote sustainable development and good corporate governance. During 2015 we voted at 11,562 shareholder meetings globally.
"In 2015, we began publishing our voting intentions in advance in selected cases, together with the reasoning behind them," says Slyngstad. "The aim is to be clear about what we expect and where we stand."
Our responsible investment approach may lead us to divest from companies following an assessment of environmental and social risk factors. We divested from 73 companies on the basis of such assessments in 2015. In the last four years, we have divested from a total of 187 companies. We expanded our risk analyses in 2015 to look more closely at social and governance issues relating to health, safety and the environment, human capital and corruption.
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