Norron’s Exklusion Criteria

Norron’s Exclusion Criteria

Norron distinguishes between passive and active sustainability and advocacy work. In our active sustainability and advocacy work, we work actively with our portfolio companies to achieve improvements in the business. It may also be the case that we act if there are incidents linked to any of our holdings. Exclusion, on the other hand, constitutes passive sustainability and advocacy work, where we consider that certain sectors and activities, due to their nature, do not meet our basic sustainability requirements and are therefore excluded. We believe that by excluding companies and sectors, we show our position and view that if the industry does not change, companies within it will not be relevant for investments either.

The use of exclusion criteria as hard values ​​can be very broad, however, and often gives rise to different interpretations. It is not always obvious that a company with some exposure to an excluded industry should be excluded. This may be, for example, due to the fact that only a very small part of the turnover can be attributed to such an industry, that the product’s area of ​​use is primarily intended for another type of business or that the connection to the excluded industry is considered minor or justifiable. An example of this is hotel chains that distribute alcohol within the business. In this case, the distribution of alcohol in particular constitutes only a small part of the turnover, while the core business relates to tourism.

Whether a company should be excluded may also depend on which financial instrument is intended for the investment. An energy company’s share may, for example, be excluded if too much of the turnover can be attributed to power production by burning fossil fuels, while the company does not work actively with emission reductions in accordance with the Paris Agreement and the 2050 net zero emissions target. A “green bond” with the aim of reducing its greenhouse gas emissions, however, by definition does not exclude such a bond because the initiative is in line with Norron’s sustainability goal of working for the Paris Agreement goals and net zero emissions by 2050.

Norron always makes an assessment in the individual case whether an investment in a company with exposure to an excluded industry is compatible with our sustainability requirements. Below we describe how we work with our exclusion criteria.

Exclusion Criteria

Pornography

Norron excludes companies that produce pornographic material. There are also companies that distribute pornographic material in their operations, such as hotels through their pay-per-view offer or media houses where pornography is included as part of the program offer. However, such distribution is excluded from the definition because it only corresponds to a very small part of the company’s total turnover.

Production: 0% of sales
Distribution: Maximum 5% of sales

Tobacco
Norron excludes companies that produce and distribute tobacco. Tobacco refers to snus, cigarettes (incl. E-cigarettes), pipe and chewing tobacco and other related addictive nicotine products. Components such as paper or plastic components and packaging are not covered by the definition. However, tobacco is often distributed in businesses with other purposes such as grocery stores or supermarket chains. Such activities are not covered by the definition.

Production: 0% of sales
Distribution: Maximum 5% of sales

Cannabis

Norron excludes companies that produce and / or distribute cannabis. Components such as paper or plastic components and packaging are not covered by the definition. Cannabis production and distribution for medical use (prescription drugs) are also not covered by the definition.

Production: 0% of sales
Distribution: 0% of sales

Alcohol Production

Alcohol production refers to the production of alcoholic beverages with an intoxicating effect. Thus, activities where alcohol is produced for other purposes, such as cleaning, skin care, etc. are not covered. We have chosen not to exclude and set a percentage on the distribution of alcohol as this would have affected the opportunity to invest in other industries with other purposes, such as the hotel industry. However, this presupposes that alcohol distribution is not a significant part of the total turnover, and a decision on this is made in each individual case.

Production: Maximum 5% of sales
Distribution: N / A

Controversial weapons

Controversial weapons include cluster munitions, landmines, biological and chemical weapons, and nuclear weapons. Norron excludes companies that produce and distribute these weapons as well as companies that produce essential components that are specifically designed for use in these products only.

Production: 0% of sales
Distribution: 0% of sales

Conventional Weapons

Norron excludes activities that produce or distribute conventional weapons, I e products used for military warfare, such as rifles, bombs, missiles and more. The definition also includes the production of essential components for such weapons, where the component is designed and produced solely for the purpose of producing weapons for warfare. In the event that there is doubt about the product’s main purpose and what the primary purpose of the product is, Norron makes an assessment in each individual case.

Production: Maximum 5% of sales
Distribution: Maximum 5% of sales

Gambling

Norron excludes companies whose core business is to conduct commercial gambling. Commercial gaming activities refer to games on betting, casinos, slot machines or online poker. Computer games (gaming) are not covered by the definition. The definition also includes the production of essential software programs for commercial gaming operations, where the software program is designed and produced only for the purpose of enabling commercial gaming operations. In the event that there is doubt about the main purpose of the software program and what the primary purpose of the program is, Norron makes an assessment in each individual case.
Production: Maximum 5% of sales
Distribution: Maximum 5% of sales

Oil & Gas (Fossil Fuels)

Norron Active, Norron Target, Norron Select and Norron Alpha can only invest in oil and gas companies that actively work with emission reductions in accordance with the Paris Agreement. In order to be relevant for an investment, such a company must be able to demonstrate that the work with emission reductions in accordance with the Paris Agreement is an integral part of the business strategy and that the company has developed an action plan with measures to achieve these goals. The same applies to companies that use fossil fuels for energy production.

Norron Sustainable Equity, Norron Premium and Norron Preserve exclude companies that extract oil and gas as well as companies whose main activities aim to facilitate and provide conditions for oil and gas extraction. With regard to energy production, Norron wants to encourage companies that are actively working on emission reductions in accordance with the Paris Agreement and net zero emissions by 2050. Provided that we make the assessment that a company is actively working towards these goals, we can in each case invest in companies that use fossil fuels for energy production.

Extraction: Maximum 5% of sales
Distribution: Maximum 5% of sales

Coal (fossil fuels)

Norron excludes companies that extract coal and companies whose main activities aim to facilitate and provide conditions for the extraction of coal. With regard to energy production, Norron wants to encourage companies that are actively working with emission reductions in accordance with the Paris Agreement and net zero emissions by 2050. Provided that we make the assessment that a company is actively working towards these goals, we can, in individual cases, invest in companies that use fossil fuels for energy production.

Extraction: Maximum 5% of sales
Distribution: Maximum 5% of sales

Companies that violate international standards

Norron excludes companies where it is generally known or where we become aware that international standards are not complied with. With regard to incidents in portfolio companies where it becomes known that the company has violated international standards, we make an assessment in each individual case of how serious the incident is. In this work, Norron’s ESG & Ownership Council is involved, whose primary task then is to assist the trustee in the assessment of the incident and recommends appropriate action. In these cases, Norron usually first contacts the company, provided that the incident is not of such a serious nature that a liquidation of the holding is justified.

Companies with elements of corruption

Norron excludes companies where it is generally known or where we become aware that companies have elements of corruption. With regard to incidents in portfolio companies where it becomes known that the company has elements of corruption, we make an assessment in each individual case of how serious the incident is. In this work, Norron’s ESG & Ownership Council is involved, whose primary task then is to assist the trustee in the assessment of the incident and recommends appropriate action. In these cases, Norron usually first contacts the company, provided that the incident is not of such a serious nature that a liquidation of the holding is justified.

Norron’s Investment Team

Our Partner Organisations

Norron is a member of the UNPRI and thus follows their principles for responsible investment. For more information, visit: www.unpri.org.

 

Norron is also a UN Global Compact signatory and supports their 10 principles based on the UN Declaration of Human Rights. Read more here: www.unglobalcompact.org

Norron is also a member of  Swesif and Hållbarhetsprofilen, see www.swesif.org for more information.