Norway’s £604bn wealth fund urges companies to focus on climate strategy
Norges Bank, the manager of Norway’s Government Pension Fund, has urged companies it invests in to test their business strategies against global climate change targets
The Norges Bank, manager of Norway’s Government Pension Fund, has urged companies it invests in to test their business strategies against global climate change targets.
According to WWF-Norway, if other funds follow Norway’s example it could see a crucial “tipping point” reached in the move towards clean energy financing.
The Norwegian sovereign wealth fund, with assets of $893 billion (£604bn), is the largest in the world and accounts for 1 per cent of all shares globally
The fund invests in over 7,000 companies and has traditionally been linked to fossil fuels.
In its latest annual report the Norges Bank has outlined its expectations for how the companies it invests in should approach climate change issues.
The report states that companies should assess how their business models will work in various scenarios and how national and international climate commitments will have an impact.
The report says that companies “should consider the successful implementation of policies to limit the likelihood of temperature rising above 2°C.”
Arild Skedsmo, conservation director for WWF-Norway, said: “This is a strong signal of a changing world, facing up to the reality of acting on climate change. This means coal, oil and gas companies in which it invests are being asked to consider just how robust their business model is in a world managing to tackle the worst impacts of climate change. So far, most oil companies have dismissed this as unrealistic and placed their bet against global action on climate change.”
A recent study by researches at the University College London found that the vast majority of fossil fuels need to stay in the ground and remain unused if dangerous levels of climate change are to avoided.
The researchers also warned that fossil fuel investments are becoming “increasingly risky”.
WWF wants the government of Norway to mandate the fund to invest 5 per cent in renewable energy and to fully divest from coal mining and coal based energy production.
Despite the news, analysis from the NGO Future in Our Hands found that the fund increased its stake in major oil and gas companies to £20 billion in 2014.
