Extra Criteria beyond the Storebrand Standard
Storebrand's extra criteria build upon the Storebrand Standard for sustainable investments. The extra criteria will only apply to selected funds and saving profiles.
The Storebrand Standard excludes companies that are in breach of international norms and conventions or involved in unacceptable operations. The standard covers the following themes: human rights and international law, corruption, corporate criminality, severe climate and environmental damage, controversial weapons (landmines, cluster munitions and nuclear weapons) and tobacco. In addition, companies with low sustainability ratings (in high-risk industries) are also covered.
1. Extra Criteria: Production and distribution of fossil fuels
Storebrand will not invest in companies:
a. which derive more than 5% of their revenue from the production or distribution of fossil fuels as well as relevant services to fossil fuel operations
b. whose fossil reserves exceed 100 million tonnes of CO2
Storebrand/SPP defines 'production and distribution' to include all activities linked to the extraction, refining and transport or distribution of fossil fuels. Companies that manufacture products derived from fossil fuels such as plastic, asphalt or synthetic rubber are not included. Public bodies such as states or local government entities are not within the scope of this criterion. Services are defined as any activity pertaining to the provision of relevant services to fossil fuel operations and other logistical activities relation to it. These include transportation, shipping and storage of fossil fuels.
The following corporate activities are considered breaches of this criterion. If a company derives more than 5% of its revenue from one and/or several of these activities, the company will be excluded.
Extraction
- Drilling oil and gas wells
- Support activities for oil and gas operations
- Tar sands extraction
- Bituminous coal and lignite surface mining
- Natural gas liquid extraction
- Crude petroleum and natural gas extraction
- Bituminous coal underground mining
- Mining and oil and gas field machinery manufacturing
Refining
- Petroleum refineries
Transport and distribution
- Gasoline stations
- Natural gas distribution
- Petroleum power generation
- Coal power generation
- Natural gas power generation
- Pipeline transportation
The threshold of 100 million tonnes of CO2 in fossil reserves was chosen because companies with larger reserves will be the most affected by the implementation of the Paris Agreement. If a two-degree target is to be achieved, large reserves of fossil fuels will have to remain in the ground, so-called 'stranded assets'.
*Data Sources
2. Extra criteria: Alcohol, Adult entertainment, Arms and Gambling
Alcohol
Storebrand will not invest in companies that derive more than 5% of their revenue from the production of alcoholic beverages or ingredients used only in alcoholic beverages. In addition, Storebrand will not invest in companies that derive more than 5% of their revenue from the distribution of alcoholic beverages.
Adult entertainment
Storebrand will not invest in companies that derive more than 5% of their revenue from the production or distribution of adult entertainment.
Arms
Storebrand will not invest in companies that derive more than 5% of their revenue from the production or distribution of arms, whether private or public. The criteria also includes the sale of products and services tailored to (support) arms, as well as, products and services that are not arms-related but tailor-made for the defence industry or the military.
Gambling
Storebrand will not invest in companies that derive more than 5% of their revenue from gambling business activities. The criteria also includes the sale of equipment and services tailored to such business activities.
3. Extra criteria: Market-oriented screening beyond the Storebrand Standard
In certain markets, industry standards for exclusion based on international norms and conventions, product screening and unacceptable operations may be even stricter than the Storebrand Standard. In these cases, further screening is carried out to ensure compliance with industry practices. Companies that are in violation of these standards/practices shall not be invested in.
4. Extra criteria: Green bonds
The following exclusion criteria applies to the purchase of green bonds beyond the Storebrand Standard.
The funds shall not buy bonds from issuers that:
- Do not fulfil the requirements set out in the extra criteria: "Alcohol, Adult entertainment, Arms and Gambling."
- Do not fulfil the requirements set out in the extra criteria: "Market-Oriented screening beyond the Storebrand Standard."
- Are companies classified according to the Global Industry Classification Standard (GICS) Sector 10, Energy
- Derive a maximum of 50% of their revenue from fossil fuel production according to the Trucost definition given above.
- Have more than 100 million tonnes of CO2 in fossil reserves
*Data Sources
- Trucost: Storebrand uses Trucost as its main supplier of fossil data. The above-mentioned activities are defined by Trucost.
- ISS-Ethix: Storebrand also receive Sector-based Screening on Fossil Fuel from ISS-Ethix
- GICS: As a safety net to prevent fossil investments due to missing data from the above mentioned data vendors, we also use GICS information as a complementary method for identifying and excluding fossil companies.
- Other data sources: Storebrand is actively working to obtain as comprehensive data as possible regarding companies that are at risk of breaching our criterion. As such, other sources of information are also used, provided that the sources are considered credible. The lack of a recognised definition of fossil-free investments means that companies that are in a grey zone for exclusion must also be considered. These companies are assessed on a case-bycase basis.
Updated 19.12.2019
Sustainable Investments
Storebrand Asset Management