or unacceptable greenhouse gas emissions. it is the independent council on ethics that issues recommendations on observation and exclusion under this criterion. based on these recommendations, the executive board of norges bank takes the final decision. a decision on exclusion means that the company is removed from both the portfolio and the benchmark index. it does not therefore draw on the limit for how much we deviate from the benchmark index. our experience is that the application of this criterion is complex and requires deep insight and detailed information on a company ’ s operations and plans. as a result of the work i have been talking about today, norges bank expects to build up further detailed information on companies ’ climate risk and climate plans. we will share this information with the council on ethics. divestment and exclusion are the final link in our chain of tools, but far from the most important. we plan to be a driver for change, pushing companies to make the transition to net zero emissions. active ownership is our most important tool. conclusion before i finish, i should also mention that we invest in companies that can contribute to climate solutions, both through the environment - related mandates and in the rest of our equity management. we are also now building up a portfolio of high - quality wind and solar power assets. the environment - related mandates were originally introduced in december 2009 and have brought positive learning effects in several parts of our organisation. as we wrote in our letter to the ministry of finance, we intend to draw more on the expertise of the managers of the environment - related mandates in other areas of our management. to sum up : our ambition is to be a leader in responsible investment. together with other large investors, we will contribute to the development of standards and methods for reporting. we will increase both the breadth and the depth of our dialogue with companies on climate issues, and we will use the full toolbox we have as an investor. we will urge companies to take the lowcarbon transition seriously – we are looking for concrete plans, not empty words or greenwashing! and not least, we will have a clear voice in our ownership work. 1 calculations based on analysis firm msci ’ s classification of companies ’ transition risk. 80 percent of the market 5 / 6 bis central bankers'speeches value of the fund ’ s equity portfolio is in the group of companies that msci classifies as having neutral exposure to transition risk. 6 / 6 bis central bankers'speeches

, known as scope 3 emissions. in many sectors, this is crucial for understanding a company ’ s climate risk. we will also work on other climate - related issues where we believe international standards may be useful. one example is the use of emission allowances. our work with companies begins with setting clear expectations. we have formulated our expectations in a set of expectation documents. when it comes to climate change, we already expect companies to have a climate strategy, set emission targets, report on progress, and stress - test their business models against various climate scenarios. in future, it will be natural for us to emphasise towards a net zero emission horizon. this will give clearer direction to our ownership activities. exercising ownership active ownership will play a key part in work on addressing the fund ’ s climate risk. a dialogue with companies will be particularly important. chart : climate increasingly a dialogue topic our dialogue with companies reflects our expectations. last year, we held around 3, 000 meetings with companies. as you can see from the chart, sustainability is increasingly on the agenda. 3 / 6 bis central bankers'speeches we plan to increase both the breadth and the depth of our climate - related ownership activities. we will give particular priority to the highest - emitting companies and companies that have not published climate plans or have inadequate climate reporting. we will also step up our ownership activities aimed at the financial sector, which is exposed indirectly to climate risk through loans and investments. we tailor our dialogue to the sector and the situation. steel and cement are good examples. these companies currently have high emissions, but their products will still be needed in the lowcarbon economy. much of our dialogue on transition plans is therefore about the technological advances and investments needed. we also raise the need for industry standards and the issue of lobbying, which is a major challenge. chart : companies ’ climate reporting is improving we are seeing signs that our efforts are paying off. for example, when we analysed the reporting of 1, 500 companies, we found that those we have actively engaged with have made more progress in their reporting on climate strategy than the other companies. of course, we cannot claim all the credit for this progress. but progress it is. in future, we will provide more information on our dialogue with companies – what we talk about and the changes we see. drawing attention to it is a tool in itself. reporting and voting our dialogue with companies will not have the desired result in every case. we can then hold boards to account