Storebrand excluded Rio Tinto PLC and Rio Tinto Ltd (Rio Tinto Group) from investment in Q2
Based on breach of deforestation criterion in Storebrand’s Exclusion Policy
Related to bauxite mining project in Brazilian Amazon
Storebrand AM sold off shares valued at NOK 195 million as of 31st May, 2025

Storebrand Asset Management has excluded the companies Rio Tinto PLC and Rio Tinto Ltd (Rio Tinto Group) for breaching the deforestation criterion in Storebrand’s Exclusion Policy.

The decision is based on Rio Tinto’s participation in the joint venture Mineração Rio do Norte (MRN), which operates a bauxite mine in the Saracá-Taquera National Forest in the Brazilian Amazon and is planning to expand the mine with effect from 2026. The expansion of the mine is planned to cover around 100 square kilometers, of which approximately 64 percent would be completely deforested during the project’s lifespan. The deforestation would contribute to loss and fragmentation of extensive areas of intact tropical rainforest, within one of the most important areas for biodiversity globally.

Rio Tinto is a global mining company with a dual-listed corporate structure, managed as a single economic unit. Rio Tinto PLC and Rio Tinto Ltd are listed on the stock exchanges in London and Australia, respectively. MRN is a joint venture between Rio Tinto (22 per cent), Glencore (45 per cent) and South32 Ltd (33 per cent). Storebrand generally considers all participants in a joint venture responsible for its business activities. Glencore and South32 are both already excluded from investment by Storebrand Asset Management, but deforestation is now added to the grounds for exclusion.

“Deforestation causes systemic risk to the global economy and financial risk in our portfolios.” - Vemund Olsen, Senior Sustainability Analyst, Storebrand Asset Management

Deforestation as part of Nature engagement theme
Our focus on deforestation is part of engagement theme on Nature. We believe biodiversity and nature loss will affect the capacity of our long-term economic growth and is likely to have implications for long-term asset returns. Failure to recognise business dependencies and impacts on nature exposes companies, and the financial institutions that invest in them, to ‘hidden’ risks. Protecting nature is therefore an integral part of our commitment to sustainability.

The Intergovernmental Panel on Biodiversity and Ecosystem Services (IPBES) highlights five direct drivers to biodiversity loss, namely land and sea use change, climate change, pollution, natural resource use and overexploitation, invasive alien species. In our work we prioritize the most material sub-industries, from the perspective of nature-related impacts, to ensure that these companies are mitigating their potential negative impacts. Our expectations to companies are built on the mitigation hierarchy that is set out in the International Financial Corporation’s (IFC) Performance Standard 6 and guided by Science-Based Targets Network (SBTN) and Taskforce on Nature-related Financial Risks (TNFD)

Storebrand’s deforestation commitment
Storebrand’s Deforestation Policy, issued in 2019, includes the ambition to eliminate commodity-driven deforestation from our investment portfolios by 2025.

However, we observe that companies are not making sufficient progress to eradicate deforestation and conversion from supply chains, and we are committed to continuing to engage forcefully on this issue, beyond 2025.

Our main lines of action are screening for and disclosure of portfolio exposure to deforestation risk, engagement with companies to reduce deforestation in operations and supply chains, policy dialogue in favor of laws and regulations that protect forests, and exclusion of companies engaged in direct deforestation.

As a part of our commitment to halting deforestation, we are engaging with companies in our portfolio that are involved in: production, trade, use or financing of forest-risk commodities and mining. Through the investor initiative Finance Sector Deforestation Action (FSDA), we contribute to engagement with 70 companies and banks, with the aim of eliminating deforestation risk from their operations, supply chains and loan books. In addition, we will continue to engage with policymakers in selected countries on deforestation, mainly through the alliance Investor Policy Dialogue on Deforestation (IPDD), of which Storebrand is co-chair.

Exclusion is used as a last resort, when companies are unwilling or unable to take necessary steps to cease or avoid deforestation.

Exclusion based on deforestation from mine expansion

Storebrand considers MRN’s mine expansion project in the Saracá-Taquera National Forest (STNF) to be a clear breach of Storebrand’s deforestation exclusion criterion. The project entails large-scale clearing of intact and highly biodiverse tropical rainforest, which counteracts the Kunming-Montreal Global Biodiversity Framework’s target of reducing the loss of areas of particular importance to biodiversity. Storebrand holds the view that the only way to prevent irreparable damage to this high conservation value rainforest ecosystem would be to refrain from expanding mining operations.

While MRN has plans in place for replanting deforested areas after mining is complete, it is our opinion that the restoration program is unlikely to succeed in restoring this globally important ecosystem to anything like its original state. While rehabilitation can be a positive initiative in already degraded areas, it is not adequate to mitigate the damage caused by the clearing of intact old growth rainforest.

“Tropical rainforests provide ecosystem services which society and the economy depends on. Intact Amazon rainforest areas must be off-limits for mining activities, or else we risk pushing the Amazon beyond its tipping point.” - Vemund Olsen, Senior Sustainability Analyst, Storebrand Asset Management

Background

In November last year, the Council on Ethics for Norway’s Government Pension Fund Global (GPFG) recommended the exclusion of Rio Tinto from investment by the GPFG, due to an unacceptable risk that the company contributes to severe environmental damage. While the board of Norges Bank decided to not follow the Council’s recommendation to exclude, instead asking Norges Bank Investment management (NBIM) to engage Rio Tinto through active ownership, Storebrand Asset Management agrees with the Council on Ethics’ assessment of the case and its recommendation to exclude Rio Tinto PLC and Rio Tinto Ltd.

Company response

Storebrand contacted Rio Tinto in May 2025 to ask for the company’s opinion on the recommendation by the Council on Ethics, expressing concern about the severe impact on intact tropical rainforest expansion of the mining area will have, and asking for confirmation of whether MRN plans to move ahead with the project. Rio Tinto confirmed the expansion plans, and pointed to MRN’s reforestation plans as a satisfactory mitigation of the project’s environmental impact.

As explained above, Storebrand does not consider rehabilitation to be sufficient mitigation of the environmental damage caused by this project. To be removed from Storebrand’s exclusion list, Rio Tinto should commit to using its influence within the MRN Joint Venture to halt any further deforestation in the STNF, or exit the Joint Venture.