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  2. Questions related to exclusion

Questions related to exclusion

  • • Extract, refine, produce, exploit, or drill for energy from coal (for electricity production), oil, gas, and uranium (≤ 5% of the company's revenue.) (O4 and O5 in the new criteria)

    • Produce or sell controversial weapons. (O6)

    • Companies that sell conventional weapons (≤ 5% of the company's revenue). (O7)

    • Produce or sell tobacco (≤ 5% of the company's revenue). (O8)

    • Companies that do not adhere to international norms and conventions in areas such as labor rights (ILO), human rights, severe corruption, and serious environmental violations. (O9)

    • Government bonds from countries under EU's or UN's financial sanctions. (O10)

    • Government bonds from countries that have not signed the Paris Agreement.

    • Government bonds from countries assessed as corrupt (ranking 40 or lower on Transparency International's corruption list) (O11)

  • There are very few companies or countries in the world that are 100% sustainable. Nordic Ecolabelling’s requirements exclude industries, companies, and countries that are furthest from sustainability. By also setting requirements that allow room for improvements within companies, Nordic Ecolabeling believes that this approach will lead to a more sustainable development in the long run.

  • Nordic Ecolabeling applies the “precautionary principle” to nuclear power, as the storage of nuclear waste and potential incidents at nuclear power plants pose a long-term risk to the environment. (O4 and O5)

  • Yes, Nordic Ecolabeling allows companies that are in the process of transitioning to renewable energy sources if they meet three rigorous requirements. It is likely that the companies meeting these requirements will have a significant global impact in transitioning to renewable energy. During the transitional period, companies can still be involved in extraction, refining, and power generation from coal, gas, oil, or uranium. The three requirements are: At least 90% of the proportion of new investments, measured over a three-year period including the most recent fiscal year, is linked to renewable energy. At least 50% of the revenue comes from renewable energy in the last 1, 2, or 3 years. No revenue must come from the extraction of oil sands, shale oil, shale gas, other fracking activities, or extraction in the Arctic region. (O4 and O5)

  • Alcohol is indeed a significant public health issue, but Nordic Ecolabeling believes that there are other more effective measures than eco-labeling to influence these companies. The tobacco industry poses serious health threats as well as the negative environmental impact caused by unsustainable cultivation. Tobacco currently causes 8 million deaths per year, according to WHO.

  • The number of publicly traded pornography companies in the world is limited, thus the feasibility of control through our criteria is low. We believe that there are other more effective measures than eco-labeling to influence these companies.

  • Maintaining a strict zero-tolerance policy on a daily basis is quite challenging, and it could overly restrict the fund's investment universe. In practice, this requirement would result in the exclusion of almost all arms-producing companies. (O6, O7)

  • Those seeking guidance from the Nordic Swan Ecolabel do so because they don't want their returns to come from activities related to coal, oil, nuclear power, tobacco, or weapons. The label is intended to encourage investments in activities that directly or indirectly contribute to positive environmental and social development. The weapons industry cannot be considered such an activity. We share this assessment with many private actors who want to provide quality-assured alternatives for savers seeking such profiles for their fund investments. The Nordic Swan Ecolabel is available for all typical funds, and funds carrying the label can invest in companies worldwide. Weapons manufacturers are international entities, making it impossible to guarantee that returns come from secure operations in Sweden and not from, for instance, countries engaged in warfare or dictatorships. If we allowed weapons manufacturers in the Eco-labelled funds, they could invest in weapon companies from countries whose defence industries don't benefit Sweden's security at all and still be eligible for the Nordic Swan Ecolabel. This isn't the guidance savers seek through the label, regardless of their opinions on Sweden's defence. Regarding conventional weapons, we mean: Small arms for private use, military weapons, and other weapons-related products and systems that directly contribute to casualties in combat and warfare. This includes small arms, bombs, grenades, rockets, missiles, ammunition, tanks, warships, military aircraft, and so on. The requirement applies to the weapon itself, not a company that, for example, produces steel and sells it to a weapons-producing company or a company that manufactures uniforms.

  • Nordic Ecolabeling has chosen to exclude the most unsustainable industries. While agricultural and forestry companies, for example, are associated with many biodiversity-related problems, we have assessed that they are not as unsustainable as the industries that are excluded. If these companies receive a poor sustainability rating, as assessed for all companies in the fund, the fund should: a) try to influence the company to reduce its negative impact and b) report on the situation in its sustainability report (O14, O18).

  • The fund should not include companies that violate human rights according to the United Nations Declaration of Human Rights. Please note that this also includes companies that face an unacceptable risk of violating norms and conventions. The requirements apply to companies and their subsidiaries, meaning companies in which they own more than 50% of the shares. Also, refer to the question "What happens if the companies included in the fund act in violation of the criteria?"

  • Serious environmental offenses involve significant negative environmental risks and/or effects that are irreversible, such as oil spills. The company has then violated national laws or international norms, or failed to take action to prevent the damage, and/or it has not implemented appropriate measures to rectify the damage. Even if the company has not been convicted in court, the offense can still be classified as a serious environmental offense. Potential environmental offenses are also included: for example, when it is deemed likely that the company's unacceptable practices will continue. (O9 in the new criteria)