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World’s largest wealth fund to decarbonise its holdings by 2050

Norway Government Pension Fund Global, the world’s largest wealth fund, will decarbonise its holdings by pushing firms to cut their greenhouse gas emissions to zero by 2050, in line with the Paris Agreement, Nicolai Tangen, Norges Bank Investment Management (NBIM) Chief Executive said on Tuesday.

The fund invests its petroleum revenues from Norway, Western Europe’s biggest oil and gas producer, in stocks, bonds, property and renewable projects abroad, for the benefit of future generations.

A zero-emissions society

“Our long-term return will completely depend on how the companies in our portfolio manage the transition to a zero-emissions society,” Nicolai Tangen stated.

Tuesday’s plan follows a proposal made in April by the Norwegian government, which said that the fund should push the 9,300 companies it invests in, to cut their emissions to nil by 2050.

Norway's Government Pension Fund Global (GPFG), an investor of oil sector revenues with its $1.4 trillion holdings making it one of the world's largest, may become a #netzero activist shareholder amid climate and market risks.

Read more: #energy

— Energy by S&P Global (@SPGlobalEnergy) April 8, 2022

We will engage the companies to reach this target by setting credible preliminary targets and creating plans to reduce their direct and indirect emissions of greenhouse gasses,” Chief Governance and Compliance Officer Carine Smith Ihenacho emphasised.

Still, the fund has previously said it would not divest from big emitters to achieve these targets but instead be an “active shareholder” to effect change.

The fund published its first expectations on how companies should address climate change more than a decade ago.

Norway also implemented a ban on the sales of new petrol and diesel vehicles that will start at the beginning of 2025, earlier than any other country.

Seven countries are banning the sales of new petrol and diesel vehicles by 2030:

1. Norway 🇳🇴 (ban by 2025)
2: Denmark 🇩🇰
3. UK 🇬🇧
4. Germany 🇩🇪
5. Ireland 🇮🇪
6. Iceland 🇮🇸
7. Netherlands 🇳🇱
8. California, United States 🇺🇸 (2035)

— Vala Afshar (@ValaAfshar) September 11, 2022

Norway Government Pension Fund Global

NBIM is a Norwegian Central Bank (Norges Bank) fund managed by Norges Bank Investment Management, the management unit of the bank.

The fund controls more than USD 1.2 trillion in assets. “The aim of the oil fund is to ensure responsible and long-term management of revenue from Norway’s oil and gas resources, so that this wealth benefits both current and future generations,” the NBIM website states.

It tracks climate-related risks, defined as the impact climate change may have on its assets, but also takes into account the opportunities that could arise for individual firms successfully adapting to the zero-emissions plan.

On average the fund owns 1.3 percent of all listed global stocks and its size is equivalent to USD 219,000 for every Norwegian citizen.

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