NBIM Co-founds “One Planet” SWF Group

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Stockholm (NordSIP) – Norges Bank Investment Management, which manages the $1 trillion Norwegian Sovereign Wealth Fund, joined forces with five other large sovereign wealth funds with a total of $3 trillion in AUM to create a framework on climate change at a summit held by French president Emmanuel Macron last week. The agreement is an outgrowth of commitments made at Macron’s “One Planet” summit last December.

Norway’s SWF joined those of Kuwait (Kuwait Investment Authority), Qatar (Qatar Investment Authority), Saudi Arabia (Public Investment Fund), the United Arab Emirates (Abu Dhabi Investment Authority) and New Zealand (Superannuation Fund) in signing a charter committing them to invest in companies that factor climate risk into their strategies. The funds also promised to publish data on how they’re reducing their carbon footprint, which is notable as the funds are largely reliant on revenue from fossil fuels determined to contribute to global warming.

The initiative was unveiled by Norway Prime Minister Erna Solberg together with Emmanuel Macron at a press conference last Friday. The agreed-upon charter states that “the transition to a low-carbon economy creates new investment opportunities” and is intended to “tilt the trajectory of the world economy towards sustainable growth and avoid catastrophic risks for the planet.”

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The framework also aims to promote the integration of climate change analysis into the management of long-term and diversified asset portfolios, fostering a “shared understanding of key principles, methodologies and indicators related to climate change” by e.g. following the recommendations of the Task Force on Climate-related Financial Disclosures.

The charter aims to commonly identify climate related risk and opportunities in the funds’ investments to “enhance their investment decision-making frameworks to better inform their priorities as investors and participants in financial markets.”

“SWFs may wish to engage with companies as a shareholder,” the charter reads, suggesting this does not amount to an outright commitment.

Image: (c) Andrey Armyagov-Fotolia

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