Stockholm (NordSIP) – Norway’s €1.7 trillion Government Pension Fund Global (GPFG) has published its latest climate and nature disclosures. The sovereign wealth fund, which is managed by Norges Bank Investment Management (NBIM), is mandated by Norway’s Ministry of Finance to align its investment portfolio with global net zero emissions targets in accordance with the Paris climate agreement.
The GPFG has a considerable carbon footprint, with financed Scope 1 and 2 emissions amounting to 47 million tonnes of carbon dioxide equivalent (tCO2e) and scope 3 emissions almost ten times greater. According to NBIM, the 3.1% year-on-year increase in financed emission is due to changes in methodology. Three quarters of the fund’s financed emissions are covered by science-based net-zero targets. Nevertheless, the Implied Temperature Rise (ITR) of the overall portfolio has risen 0.1 degrees since 2023 to the current level of 2.52 degrees, which is significantly off the Paris agreement target of 1.5 degrees. According to NBIM, the recent increase is linked to the scope 3 emissions of large technology companies.
There is steady improvement within the GPFG real estate portfolio, with almost half of the assets now aligned with a 1.5-degree pathway as evaluated with the Carbon Risk Real Estate Monitor (CCREM) methodology. NBIM is also measuring the fund’s impact and exposure to nature and biodiversity related risks, using geospatial data and the UN-sponsored ENCORE suite of metrics. While consumer staples and food production represent the largest area of exposure, NBIM has also identified the technology sector’s vastly increasing appetite for water as a major cause for concern. The latest report nevertheless shows that the GPFG’s weighted average natural capital impact intensity is 3% lower than the reference index.
Is NBIM delivering on its Climate Action Plan 2025?
As well as laying out its methodology for measuring and disclosing a broad range of climate and nature data points, NBIM explains what actions it is taking to address these challenges. This includes its involvement with standard setters, non-governmental institutions, and policymakers. NBIM also acts at company level through engagement, voting, and in some cases portfolio exclusions. It states that 519 companies were engaged with on climate and nature topics, with 10 companies being excluded. Five of these were considered to represent an elevated risk related to high greenhouse gas (GHG) emissions, including coal mining and coal-based electricity generation. Three were divested due to insufficient management of water use risk, and a further two were cut due to their role in degrading biodiversity and ecosystems. NBIM also reinstated 8 previously excluded companies due to measured improvements.
When originally presenting its Climate Action plan 2025 NBIM warned portfolio companies of its intention to use its size and influence as an activist investor. However, the number of engagements and exclusions reported for 2024 should be seen in the context of an equity portfolio of some 9,000 stocks. NBIM is still singled out in German NGO Urgewald’s Investing in Climate Chaos database as Europe’s largest fossil fuel investor. The GPFG holds roughly €62 billion worth of shares in companies on Urgewald’s Global Coal Exit List (GCEL) and Global Oil and Gas Exit List (GOGEL). The GCEL and GOGEL identify those companies most responsible for fossil fuel expansion. The GPFG also contains €185 million worth of Russian stocks, including energy sector companies Lukoil and Gazprom. These fall outside NBIM’s engagement activities, which are mainly focused on the United States, Japan, China, and Western Europe.
People’s panel calls for more sustainable investment
On 13 May 2025 the Citizens Assembly for Norway’s Future (Framtidspanelet) published the results of deliberations. The process began in 2024 with the random selection of 40,000 Norwegians, from which a panel of 66 people was formed to explore ways to better exploit the vast resources of the GPFG. The broad consensus was a desire to invest sustainably at home and abroad, whether by boosting renewable energy or supporting developing nations in shifting away from fossil energy. The assembly was willing to forgo some financial returns in achieving these aims. Despite its impressive range of sustainability metrics and disclosures, it would appear that NBIM has some way to go before it will fully meet the expectations of Norway’s citizens.
