Covalence Norms-based Exclusions Monitor: Q2 2026 Update

illuminem summarises the essential news of the day. Covalence’s latest Norms-based Exclusions Monitor reveals a sharp rise in climate-related exclusions across the energy and utilities sectors during the second quarter of 2026. Energy companies recorded 671 additional exclusions, while utilities added 250, with the increase concentrated primarily among companies based in China, the United States, and Canada. The findings point to a growing hybrid approach in responsible investment: fossil fuel companies are not excluded automatically, but increasingly face restrictions when they lack credible transition plans or fail to meet climate standards. Read the full analysis here, or explore illuminem’s exclusive coverage below.

At the end of the second quarter of 2026, we observe a sharp increase in the number of energy and utility companies appearing on norms-based exclusion lists. Covalence's Norms-based Exclusions Monitor aggregates 64 exclusion lists published by asset owners and asset managers worldwide, as well as by the United Nations, and tracks companies named in these lists for conduct-based reasons.

Energy sector exclusions surge

Energy recorded +671 exclusions during Q2 2026, bringing the total to 1,912. In relative terms, the Energy sector now accounts for 30.2% of all norms-based exclusions tracked by Covalence, up from 25.9% in Q1 2026. In terms of the number of companies affected, 411 companies in the Energy sector now appear on at least one list, up from 351 at the end of Q1 2026.

Utilities follow the same trend

Utilities recorded +250 exclusions during Q2 2026, bringing the total to 793. Utilities now account for 12.5% of all norms-based exclusions, up from 11.3% in the first quarter of 2026. 198 utility companies appear on at least one list, up from 174 at the end of Q1 2026.

Where the increase is concentrated

This sharp increase in the number of energy and utility companies excluded primarily involves companies based in China (+414), the United States (+390), and Canada (+116).

A hybrid form of exclusion

This is a hybrid form of exclusion that combines product-based and conduct-based exclusions. The energy and utilities sectors are not automatically excluded, but companies in these sectors that do not make efforts to combat climate change (such as a plan to transition to carbon neutrality) are increasingly being excluded.

Among the reasons cited to justify these exclusions are: "climate-related factors", "Climate criteria", "GHG Emissions", "Fossile expansion", "Climate Standards", "Climate Action 100+", "Oil&Gas – not aligned", "Fossil – Missing transition plan".

In most cases, these categories were already included in the exclusion lists analyzed in previous quarters, and it was the number of listed companies, and the number of exclusions targeting those companies, that increased.

New exclusion categories emerge

In some cases, climate-related categories have been newly added. This is the case, for example, with the Swiss Association for Responsible Investment (SVVK-ASIR), which brings together a dozen major institutional investors. SVVK-ASIR recommends that its members refrain from further investments in debt securities of seven companies. This marks the first time that SVVK-ASIR has issued a deny debt recommendation. The companies concerned, Chevron Corp., ExxonMobil Corp., Marathon Petroleum Corp., PBF Energy Inc., Phillips 66, Saudi Arabian Oil Co., and Valero Energy Corp., all operate in the fossil fuel sector. The decision follows insufficient progress in the climate transition dialogue.

Finally, during the second quarter of 2026 Covalence identified new lists that include climate-related categories. One example is Danica, a Danish pension fund, which excludes companies under the category "Fossil Fuel Transition Laggards Exclusions".

SpaceX added to exclusion lists

In addition, the second quarter of 2026 was also marked by the inclusion of Space Exploration Technologies Corp. (SpaceX) on several norms-based exclusion lists, while the company went public on June 12.

Among the institutions that made this decision were pension funds based in the Netherlands and Denmark. The reasons cited to justify these exclusions include, in particular: "Human rights, Governance", "Board decision" or "Controversial business practice".

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