Norges Bank, Norway’s central bank has decided to exclude three Jardin Matheson companies from the country’s colossal US$1.6 trillion sovereign wealth fund – the Government Pension Fund Global (GPFG), which the bank manages – due to unacceptable risk of the companies contributing to or being responsible for severe environmental damage.

The exclusion of the three companies – Jardine Matheson Holdings; Jardine Cycle & Carriage, the conglomerate’s Southeast Asia holding company; and Astra International, an Indonesian conglomerate in which Jardine is the majority shareholder – is related to concerns related to the Martabe gold mine in Sumatra, which is owned by Astra subsidiary United Tractors, the bank's executive board says.

The mine lies within the confines of the critically endangered Tapanuli orangutan’s sole remaining habitat. The orangutan is the most critically endangered of all the great apes, of which there are fewer than 800 left and whose survival depends on the preservation of this habitat.

The GPFG’s ethics council says that it made the recommendation to severe ties with the companies based on the fact that the company is planning to significantly increase the mining area during the mine’s lifetime, new deposits will be exploited if commercially viable, and the Indonesian authorities have granted permission for mining operations in an area that is, as of yet, undeveloped.

The council considers that, as long as Astra’s activities result in a reduction in the size of the orangutan’s habitat, the risk of the companies contributing to serious environmental damage will remain unacceptable.

Astra, as well, has been under observation since October 2015 due to the development of palm oil plantations in Indonesia by one of its subsidiaries, Astra Agro Lestar, and consequently there was a risk of increased deforestation and loss of biodiversity.

However, the ethics council recommended that observation, pursuant to this issue, be discontinued, irrespective of the decision to exclude Astra on the grounds of its involvement in the Martabe mine, due to the company’s measures to reduce the risk of deforestation.

The decision on excluding the three companies, the executive board says, is based a recommendation made by the council in May of 2023; and, while the board says it has not conducted an independent assessment of all aspects of the recommendation, it is satisfied that the exclusion criteria have been fulfilled.

Before deciding to exclude a company, Norges Bank considers whether the use of other measures, including the exercise of ownership rights, may be better suited to the situation. In this case, however, the bank’s executive board has concluded that the use of other measures is not appropriate.