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Norway wealth fund to require net-zero by 2050 for portfolio holdings

September 20, 2022

Bloomberg ($):

Norway’s $1.2 trillion sovereign wealth fund will require the companies it invests in to reach net-zero emissions by 2050 at the latest, joining many global investors in setting such goals to prevent the financial risks from a “delayed transition.” 

Just 10% of companies in the wealth fund’s portfolio have a net-zero target for 2050, even as many have taken strides toward emission targets, Norges Bank Investment Management Chief Governance and Compliance Officer Carine Smith Ihenacho said at a news conference in Oslo on Tuesday.

The world’s biggest owner of publicly traded companies will push for businesses to reach the goal via “credible” interim targets and plans to reduce emissions, it said in its climate action plan on Tuesday. While many investors including BlackRock Inc. have set net-zero targets, some have argued such goals would not be helpful in fighting climate change.

“The best way to solve these problems is that the companies have responsible shareholders,” Chief Executive Officer Nicolai Tangen said, speaking at the same event. While it would be easy to reduce the fund’s climate exposure by selling shares in firms that are large polluters, “it doesn’t solve any problems, on the contrary,” Tangen said, “someone has to own these companies.” 

[Kari Lundgren and Stephen Treloar]

More: Norway Wealth Fund Sets Net-Zero Target for Portfolio Firms

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