Exclusion of Companies and Countries

PFA’s approach to excluding companies

As an active investment manager, PFA selects or opts out of investments by considering whether the investment in question is offering an appropriate risk-adjusted return in relation to the implied sustainability risks and other investment risks such as interest rate risks, liquidity risks, and market risks. This results in our not investing in certain companies if it is assessed that the investment is associated with unacceptably high sustainability risks. However, the systematic and categorical exclusion of individual companies is often not a constructive or long-term solution, as it means that one gives up on the opportunity to impact the excluded company. Rather than exclusion, PFA therefore wishes as a starting point to exercise active ownership with a view to creating improvements that reduce sustainability risks associated with the investment.

In extreme cases, however, it may be necessary to exclude companies from PFA’s investment universe. If a company violates the international norms and guidelines that form the basis of PFA's Policy for Responsible Investments and Active Ownership, PFA will assess the scope, severity and frequency of the violation. If PFA assesses that there is no prospect of the company wanting to improve its behaviour, this may result in an exclusion. This happens, for example, if the company does not respond to dialogue or drags out the dialogue without improving its behaviour. An exclusion is approved by PFA’s Executive Board.

 

  
In addition, PFA has decided to work with threshold values for climate-related high-risk activities associated with the extraction of thermal coal and tar sand. Specially, PFA excludes companies whose revenue from tar sand oil extraction or the extraction of thermal coal exceeds 5 per cent of the company’s total revenue.

Based on the international conventions and guidelines, PFA also does not want to invest in companies that produce controversial weapons such as cluster bombs, anti-personnel land mines or nuclear weapons. PFA has a non-engagement approach towards such companies. PFA has specified clear exclusion criteria that are based on external data concerning companies’ involvement with this, and PFA systematically excludes companies if they supply dedicated components to such weapons.

You can read more about PFA's approach to the exclusion of companies in PFA's Guidelines for Active Ownership and see our current exclusion list below.

In 2023, PFA has excluded 11 companies on top of the already 82 excluded companies. The total number of excluded companies therefore comes to 93.
  

Complete overview of excluded companies

PFA’s exclusion list is revised every six months and, if any changes are made to it, updated at pfa.dk. A company can be reconsidered if it can demonstrate that it has changed its practices.

Complete overview of exclusion list

company country industry Reason for exclusion
Human rights
Elbit Systems  Israel Electronics Breach of fundamental human rights which, among other things, are in violation of UN Global Compact principles 1 and 2
Energy Transfer Equity  USA  Energy  Breach of fundamental human rights which, among other things, are in violation of UN Global Compact principles 1 and 2
Energy Transfer Partners  USA  Energy  Breach of fundamental human rights which, among other things, are in violation of UN Global Compact principles 1 and 2
HeidelbergCement Germany Materials Breach of fundamental human rights which, among other things, are in violation of UN Global Compact principles 1 and 2
Petroleos de Venezuela SA Venezuela Energy Breach of fundamental human rights which, among other things, are in violation of UN Global Compact principles 1 and 2
State Oil Co. Of the Azerbaijan Republic Azerbaijan Energy Breach of fundamental human rights which, among other things, are in violation of UN Global Compact principles 1 and 2
Labour rights
Wal Mart USA Retail Breach of fundamental labour rights which, among other things, are in violation of UN Global Compact principles 3 and 4
Climate and environment
AFRICAN RAINBOW MINERALS LIMITED  South Africa  Materials  Is mostly engaged in thermal coal activities, which are particularly polluting 
Athabasca Oil Corp.   Canada  Energy  Is mostly engaged in tar sands activities, which are particularly polluting 
Banpu PCL  Thailand  Energy  Is mostly engaged in thermal coal activities, which are particularly polluting  
Baytex Energy Corp.  Canada  Energy  Is mostly engaged in tar sands activities, which are particularly polluting 
Canadian Natural Resources Ltd Canada Energy Is mostly engaged in tar sands activities, which are particularly polluting
Canadian Oil Sands Ltd.  Canad  Energy  Is mostly engaged in tar sands activities, which are particularly polluting
Cenovus Energy Inc  Canada Energy Is mostly engaged in tar sands activities, which are particularly polluting
China Shenhua Energy Company Limited  China  Materials Is mostly engaged in thermal coal activities, which are particularly polluting
COAL INDIA LTD.  India Materials Is mostly engaged in thermal coal activities, which are particularly polluting
Connacher Oil & Gas Ltd.  Canada  Energy Is mostly engaged in tar sands activities, which are particularly polluting 
Exxaro Resources Limited  South Africa Materials Is mostly engaged in thermal coal activities, which are particularly polluting
Guanghui Energy Co., Ltd.   China Energy Is mostly engaged in thermal coal activities, which are particularly polluting
Harvest Operations Corp.  Canada Energy  Is mostly engaged in tar sands activities, which are particularly polluting
Huadian Power International Corporation Limited  China Utilities Is mostly engaged in thermal coal activities, which are particularly polluting
Husky Energy Inc Canada Energy Is mostly engaged in tar sands activities, which are particularly polluting
Imperial Oil Ltd Canada Energy Is mostly engaged in tar sands activities, which are particularly polluting
Japan Petroleum Exploration Co., Ltd. Japan  Energy Is mostly engaged in tar sands activities, which are particularly polluting
Jardine Cycle & Carriage Ltd.  Singapore  Industrials  Is mostly engaged in thermal coal activities, which are particularly polluting  
Jardine Matheson Holdings Limited  Hong Kong Consumer discretionary Is mostly engaged in thermal coal activities, which are particularly polluting
MEG Energy Corp Canada Energy Is mostly engaged in tar sands activities, which are particularly polluting
Obsidian Energy Ltd.  Canada  Energy Is mostly engaged in tar sands activities, which are particularly polluting
Pengrowth Energy Corp.   Canada Energy Is mostly engaged in tar sands activities, which are particularly polluting
Perennial Energy Holdings Ltd.  Hong Kong Materials Is mostly engaged in thermal coal activities, which are particularly polluting
Petro-Canada  Canada Energy Is mostly engaged in tar sands activities, which are particularly polluting
PT Adaro Energy Tbk.  Indonesia Materials Is mostly engaged in thermal coal activities, which are particularly polluting
PT Astra International Tbk.   Indonesia Consumer discetrionary Is mostly engaged in thermal coal activities, which are particularly polluting
PT United Tractors Tbk.  Indonesia  Materials  Is mostly engaged in thermal coal activities, which are particularly polluting
Shanxi Coal International Energy Group Co., Ltd.  China  Energy  Is mostly engaged in thermal coal activities, which are particularly polluting  
Shanxi Coking Coal Energy Group Co., Ltd.  China  Materials Is mostly engaged in thermal coal activities, which are particularly polluting
Shanxi Lu'an Environmental Energy Dev., Co., Ltd.  China Materials Is mostly engaged in thermal coal activities, which are particularly polluting
Shaanxi Coal Industry Company Limited  China Materials Is mostly engaged in thermal coal activities, which are particularly polluting
SOUTH32 LIMITED  Australia Materials Is mostly engaged in thermal coal activities, which are particularly polluting
Suncor Energy Inc Canada  Energy Is mostly engaged in tar sands activities, which are particularly polluting
Suncor Energy Ventures Holding Corporation  Canada Energy Is mostly engaged in tar sands activities, which are particularly polluting
TATNEFT' PAO  Russia Energy Is mostly engaged in tar sands activities, which are particularly polluting
TBEA CO., LTD. China Industrials Is mostly engaged in thermal coal activities, which are particularly polluting
Teck Resources Ltd.   Canada Materials Is mostly engaged in tar sands activities, which are particularly polluting
Thungela Resources  South Africa Materials Is mostly engaged in thermal coal activities, which are particularly polluting
Washington H Soul Pattinson and Company Limited  Australia Financials Is mostly engaged in thermal coal activities, which are particularly polluting
Yanzhou Coal Mining Company Limited  China Materials Is mostly engaged in thermal coal activities, which are particularly polluting
Cluster bombs, anti-personnel landmines and nuclear weapons
Aerojet Rocketdyne Holdings USA  Defence Involved in the production of nuclear weapons and cluster bombs
Airbus Group France  Defence Involved in the production of nuclear weapons 
Anhui GreatWall Military Industry Co., Ltd.  China  Defence Involved in the production of cluster bombs
Aselsan Elektronik Sanayi ve Ticaret Anonim Sirketi  Turkey Defence Involved in the production of cluster bombs
Babcock International Group PLC  The United Kingdom  Defence   Involved in the production of nuclear weapons 
BAE Systems plc The United Kingdom
 Defence Involved in the production of nuclear weapons
Bharat Electronics  India  Defence   Involved in the production of nuclear weapons 
Boeing Co. USA  Defence Involved in the production of nuclear weapons
BWX Technologies, Inc.  USA  Defence   Involved in the production of nuclear weapons 
CACI INternational Inc.  USA  Defence  Involved in the production of nuclear weapons  
China Shipbuilding Industry Company Limited  China  Defence Involved in the production of nuclear weapons 
Constructions Industrielles de la Mediterranee Societe Anonyme  France  Defence Involved in the production of nuclear weapons  
Daikin Industries Ltd.  Japan  Defence  Involved in the production of white phosphorus 
Dassault Aviation S.A.  France  Defence Involved in the production of nuclear weapons  
Ducommun Inc  USA  Defence Involved in the production of nuclear weapons  
Elbit Systems Ltd.  Israel  Defence Involved in the production of controversial weapons 
Flour Corp.  USA Defence Involved in the production of nuclear weapons 
General Dynamics  USA  Defence Involved in the production of nuclear weapons and cluster bombs
Hanwha Corp  South Korea Defence Involved in the production of cluster bombs
Honeywell International Inc.  USA  Defence Involved in the production of nuclear weapons 
Huntington Ingalls Industries  USA  Defence   Involved in the production of nuclear weapons 
ICL Group  Israel  Defence  Involved in the production of controversial weapons  
Jacobs Engineering  The United Kingdom  Defence   Involved in the production of nuclear weapons 
Jacobs Solutions Inc.   USA  Defence  Involved in the production of nuclear weapons  
L3Harris Technologies Inc.   USA  Defence  Involved in the production of nuclear weapons  
Larsen & Toubro  India  Defence Involved in the production of nuclear weapons 
Leidos Holdings  USA  Defence  Involved in the production of controversial weapons  
Leonardo SPA Italy Defence Involved in the production of nuclear weapons
LIG Nex1 Co Ltd  South Korea  Defence Involved in the production of cluster bombs
Lockheed Martin USA  Defence Involved in the production of nuclear weapons and cluster bombs
Moog Inc.  USA Defence  Involved in the production of nuclear weapons  
Northrop Grumman Corp. USA  Defence Involved in the production of nuclear weapons
Oceaneering International Inc.  USA  Defence  Involved in the production of nuclear weapons  
Poongsan Corp South Korea  Defence Involved in the production of cluster bombs
Poongsan Holding Corp South Korea  Defence Involved in the production of cluster bombs
Raytheon Technologies Corp USA  Defence Involved in the production of nuclear weapons 
Rheinmetall AG  Germany  Defence  Involved in the production of white phosphorus  
S&T Dynamics Co. Ltd.  South Korea  Defence Involved in the production of anti-personnel mines
S&T Holdings Co. Ltd.   South Korea  Defence   Involved in the production of anti-personnel mines
Safran Group France  Defence Involved in the production of nuclear weapons 
Serco Group The United Kingdom  Defence Involved in the production of nuclear weapons 
Textron USA USA  Defence Involved in the production of cluster bombs
Thales  France  Defence   Involved in the production of nuclear weapons 
The Tata Power Company Limited  India  Defence   Involved in the production of nuclear weapons  
Unis-Pretis NIS dd Vogosca  Bosnia  Defence  Involved in the production of white phosphorus  
Walchandnagar Industries Ltd.  India Defence Involved in the production of nuclear weapons  

 

PFA’s approach to the exclusion of government bonds

PFA excludes countries that are either subject to international sanctions or which PFA has assessed as being inappropriate to invest in. In addition, PFA can deselect countries' government bonds in its management based on sustainability risks, such as low levels of democracy or vulnerability to corruption.

PFA also bases its decision on the foreign policy recommendations issued by Denmark and the EU. In addition, PFA further screens government bonds on an ongoing basis based on the EU’s Principal Adverse Impacts (PAI) indicators1 to assess and monitor developments in sustainability factors. The mandatory PAI indicators, which are relevant for government bonds, include, for example, consideration of countries' greenhouse gas intensity and whether they comply with social rights and legislatively comply with international treaties, conventions and UN principles. If an excluded country is to be reconsidered as one suitable to invest in again, this at minimum requires that the objectionable circumstances identified by PFA have been significantly improved and that this can be documented.

Currently, the following countries are excluded:

  • Belarus
  • The Republic of Congo
  • Rwanda

This list only contains countries where PFA itself has refrained from investing in government bonds, and thus does not include countries such as Russia, North Korea, Syria and Iran, which are not possible to invest in as a result of international sanctions, as well as those countries which do not have government bonds, or which do not constitute an attractive investment market for these. We evaluate the exclusion list at least once every six months. There are many countries that PFA is not currently invested in due to sustainability and investment reasons, this also applies to countries that are not on PFA's exclusion list or covered by international sanctions.

1 The Disclosure Regulation commits financial market participants to measuring and publishing information on the most adverse impacts on sustainability factors (Principal Adverse Impacts) associated with their investments.

Read more about our approach to working with responsible investments