Norges Bank Investment Management publishes a new 2025 climate action plan and sets targets for net zero emissions by 2050 for all companies in its portfolio.
The Norwegian sovereign fund, the largest sovereign fund on the planet – 1.200 billion euros – is raising its environmental objectives and announced earlier this week its new climate action plan, with the full greening of its investments by 2050.
Climate change is one of the greatest challenges of this century. In addition to serious consequences for the world’s climate and living conditions for human beings, the changes will result in considerable risk for the global economy. Through ownership in more than 9,000 companies in 70 countries, the climate risk of the fund reflects the climate risk of the global economy.
The Fund has a clear financial interest in the goals of the Paris Agreement being reached. Their analyses show that a delayed climate transition is what constitutes the greatest financial risk for the fund.
”Our goal is to be the world’s leading investor in terms of how climate risk is managed. Our long-term return will depend on how the companies in our portfolio manage the transition to a zero emissions society”CEO of Norges Bank Investment Management Nicolai Tangen
The Fund has worked with climate for more than 15 years. “Over the past fifteen years, the Fund has sold out of over 150 businesses and invested more in companies willing to tackle climate change”. However, more efforts must be done and the new action plan specifically shows how the Fund will proceed.
The Fund is present in more than 9,000 companies in 70 countries. Therefore, it requires those 9,000 companies in which it has invested to achieve net zero CO2 emissions while only10% of those companies have a net-zero target for 2050, even though, many have taken strides toward emission targets.
”We set a target of net zero emissions by 2050 at the latest for all companies. And we will engage with the companies to reach this target by setting credible preliminary targets and creating plans to reduce their direct and indirect emissions of greenhouse gases.”Chief Governance and Compliance Officer Carine Smith Ihenacho
The climate action plan is a result of work across the fund, and it is also based on input and investigations from external experts – particularly last year’s report from the Skancke committee. The Ministry of Finance has also made changes to the management mandate that relate to the climate.
Norwegian Funds : New climate action plan