Norway's wealth fund to push the firms to net zero emissions

Norway’s firms to meet net zero emissions goal

Norway’s firms have to cut their greenhouse gas emissions to net zero emissions by 2050. It is a goal imposed by Norway’s wealth fund in order for the country’s economy to fully comply with the Paris Agreement. The plan follows a proposal made in April by the government. The government proposed companies the Fund invests in fully decarbonize their production.

Decarbonizing the entire Norwegian economy is in line with future long-term investments of the Fund.
According to the Fund’s CEO, Nicolai Tangen, the wealth fund’s long-term return entirely depends on how the companies manage the transition to a zero-emissions society.

What’s the plan to reach net zero emissions?

As one of the world’s largest investors, the fund has invested in climate projects for over a decade. Being a shareholder in as many as 9,300 companies, the Fund sets its expectations on companies to fulfill the strategy of stopping climate change.

The new plan is for the wealth fund to intensify the dialogue with the 174 companies that are the biggest emitters of greenhouse gas emissions. These companies produce 70% of the greenhouse gas emissions of all firms where the Fund is a shareholder.

Still, the fund announced it would not dispossess the shares from big emitters to achieve its targets. Instead, it will be an active shareholder to induce change.

But, all companies the Fund will invest in the future will need to have a plan to cut emissions to net zero by 2050.
Fund made massive investments in wind power lately. Since then, energy was the only sector that did not see negative returns.

What is Norway’s wealth fund?

Norway’s vast North Sea oil and gas reserves are the base of the fund’s wealth. Energy was the only sector that did not see negative returns after that.

The government of Norway is the owner of the Fund. Founded in 1996, the sovereign wealth fund invests revenue from Norway’s oil and gas sector in the North Sea. The foundation of the fund’s wealth is gas reserves.

Besides, the Fund invests in stocks in more than 9,300 companies globally. The Fund owns approximately 1.3% of all listed global stocks. Also, it invests in bonds, property, and renewable projects abroad. This makes Norway’s wealth fund the world’s largest and thus influential enough to realize the plans of net zero emissions.