Gwladys Foouche

OSLO (Reuters – Norway’s richest wealth fund at $1.4 trillion is not planning to divest its investments from major greenhouse gas emitters to comply with plans to carbon-neutralize their portfolio by 2050.

The central bank’s deputy head, who is also responsible for the fund, said Tuesday that it would be an “active investor” in these companies, pushing them towards net zero emissions and then selling them off if their business models do not work.

This fund uses Norway’s oil and gas revenues to invest in stocks, bonds and property abroad. The fund invests in approximately 9,100 companies worldwide and holds on average 1.4% all global listed stocks.

The company estimates that its carbon footprint is 107.6 millions tonnes CO2 equivalent, which is roughly double the amount Norway emits in 2019.

As with many long-term investors the fund also looks at climate change adaptation.

The fund was recommended by a panel appointed by the government in August to push its investors to lower their greenhouse gas emissions by mid-century in compliance with the Paris Agreement.

Jonas Gahr Stoere (at the time, leader of the Opposition and currently prime minister) stated that the recommendation of the panel would become part of the mandate for the fund.

Oeystein Böersum, deputy governor of Oeystein Bank, said Tuesday that the bank had supported the panel’s recommendations, but this shouldn’t be understood as an offer to divest businesses with high levels of emissions.

He stated that “that is not our intention” and said instead that the fund would become an “active shareholder”.

Boersum expressed concern about high-emitting industries like steel or cement production and said that their products would still be required in a low-carbon world.

“Part of our conversation on transition plans is about technological advancements and the investments required. He also spoke out about the importance of industry standards, and lobbying as a challenge.

However, the fund will divest businesses with insolvent business models, he said.

One campaigner offered a cautious welcome to the bank plan.

Martin Norman, an Australasian Centre of Corporate Responsibility researcher and shareholder advocate, said that “they are making big steps forwards, but they still have a lot to go.”

Both medium and short-term goals could have been established. He said, “We need to cut emissions now.”

(Graphic: Market value of Norway’s wealth fund, https://graphics.reuters.com/NORWAY-SWF/qzjvqajwgvx/chart.png)