# Norway’s wealth fund tells firms to set net zero emission goals
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-09-20
Category: INVESTING
Category URL: https://financedigest.com/category/investing
Meta Title: Norway's $1.2 Trillion Wealth Fund to Push Companies to
Meta Description: Norway's $1.2 trillion wealth fund aims for net zero emissions by 2050, prioritising dialogue with major emitters. No divestment, just active shareholder
URL: https://financedigest.com/norways-wealth-fund-tells-firms-to-set-net-zero-emission-goalshtml

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By Victoria Klesty

OSLO (Reuters) – Norway’s $1.2 trillion wealth fund, one of the world’s largest investors, said on Tuesday it would push the companies it invests in to cut their greenhouse gas emissions to net zero by 2050, in line with the Paris Agreement.

Institutional investors are increasingly looking to reduce the role they play in global warming through their investments, with Norway’s move coming ahead of the next round of global climate talks in Egypt in November.

The fund [invests the revenue from Western Europe’s biggest oil and gas producer for future](https://www.financedigest.com/investing-in-the-city-thats-investing-in-itself-welcome-to-the-liverpool-of-the-future.html "INVESTING IN THE CITY THAT’S INVESTING IN ITSELF – WELCOME TO THE LIVERPOOL OF THE FUTURE!  ") generations in stocks, bonds, property and renewable projects abroad. It owns on average 1.3% of all listed [global stocks](https://www.financedigest.com/dollar-jumps-u-s-stocks-buck-global-rally.html "Dollar jumps, U.S. stocks buck global rally") and its holdings equate to $219,000 for every Norwegian man, woman and child.

Under the new plan, the fund will prioritise dialogue with the 174 companies that are the biggest emitters of greenhouse gases and account for 70% of the [fund’s emissions via its shareholdings](https://www.financedigest.com/intercos-fund-shareholders-l-catterton-otpp-sell-6-stake-at-7-discount.html "Intercos fund shareholders L Catterton, OTPP sell 6% stake at 7% discount").

They will be the priority,” [fund CEO](https://www.financedigest.com/foresight-metering-appoints-ex-npower-ceo-volker-beckers-as-non-executive-chairman-to-lead-smart-meter-funding-drive.html "Foresight Metering appoints ex npower CEO, Volker Beckers, as Non-Executive Chairman to lead smart meter funding drive") Nicolai Tangen told Reuters. “So more frequent follow-ups, and more specific follow-up. They will [see more pressure from us than other companies.”](https://www.financedigest.com/wait-and-see-u-s-companies-curb-investment-as-they-await-fed-moves.html "Wait and see: U.S. companies curb investment as they await Fed moves")

The [fund has engaged with the companies it invests](https://www.financedigest.com/plastic-antibody-developer-strengthens-board-following-further-investment-from-mercia-fund-management.html "“Plastic antibody” developer strengthens board following further investment from Mercia Fund Management") in on climate change for over a decade by, for instance, setting out its expectations as a shareholder on climate change.

Tuesday’s plan follows a proposal made in April by the government, which said the [fund should push](https://www.financedigest.com/in-renewed-push-spain-to-tender-eu-funds-for-evs-batteries-in-july.html "In renewed push, Spain to tender EU funds for EVs, batteries in July") the 9,300 companies it invests in to cut their net emissions to zero by 2050.

![](https://www.globalbankingandfinance.com/wp-content/uploads/2022/09/chart-1.jpg)

Still, the [fund reiterated it would not divest from big](https://www.financedigest.com/with-big-bets-on-musk-these-funds-may-have-a-tesla-problem-in-23.html "With big bets on Musk, these funds may have a Tesla problem in ’23") emitters to achieve these targets. Instead, it will be an “active shareholder” to [effect change](https://www.financedigest.com/cornerstones-of-effective-organisational-change-management.html "Cornerstones of effective organisational change management").

The easy way to [cut down emissions](https://www.financedigest.com/citi-pledges-to-cut-emissions-for-more-sectors-including-coal.html "Citi pledges to cut emissions for more sectors including coal") is to sell out,” Tangen told a news conference. But someone needs to own these companies and it does not [solve the problem](https://www.financedigest.com/british-start-up-reveals-the-secret-to-solving-the-problem-of-identity-fraud.html "British start up reveals the secret to solving the problem of identity fraud"), quite the contrary.

All companies the [fund invests in will need](https://www.financedigest.com/need-additional-funding-but-not-sure-how-to-go-about-it.html "Need additional funding but not sure how to go about it?") to have a plan to cut emissions to net zero by 2050. As of now, only 10% of the companies in the [fund’s portfolio had a credible plan](https://www.financedigest.com/uk-drops-plan-to-tax-sovereign-wealth-funds.html "UK drops plan to tax sovereign wealth funds"), representing 38% of the fund’s value, it said.

The fund will not publicly name the [worst offenders](https://www.financedigest.com/finance-amongst-worst-offenders-as-74-of-security-incidents-come-from-within-organisations-not-hacking-groups.html "Finance amongst worst offenders as 74% of security incidents come from within organisations, not hacking groups").

“To name and shame you need to be very sure and certain, and you need, in my mind, to have audited numbers and evidence,” Tangen said.

The fund will likely be more active in [voting against whole boards](https://www.financedigest.com/hsbc-board-recommends-shareholders-vote-against-spin-off-resolution.html "HSBC board recommends shareholders vote against spin-off resolution"), and also become active in making shareholder proposals, though details of what they could look like “remains to be seen”, he added.

As a last resort, the [fund could sell](https://www.financedigest.com/nissan-pushes-partner-renault-to-sell-down-stake-may-raise-funds-source.html "Nissan pushes partner Renault to sell down stake, may raise funds -source") out of a company if it saw no evidence of it moving in the desired direction.

“It will take a little bit of time, you have to give them the opportunity to react,” said Tangen.

(Reporting by Victoria Klesty Editing by Jason Neely and Mark Potter)


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