Norway wealth fund to assess climate risks in power oil materials
Yngve Slyngstad
Norway ’ s $ 1 trillion sovereign wealth fund will this year step up its assessment of the risks posed by climate change to its investments in power producers   oil firms and basic materials companies   its CEO told Reuters on Tuesday . Separately   the board of the central bank will soon decide whether to blacklist from the fund one or more companies -- either in the oil   steel or concrete sectors -- for producing too much greenhouse gases   the central bank chief told Reuters . The fund   which invests the proceeds from Norway ’ s oil and gas production for future pensions in stocks   bonds and real estate abroad   is one of the world ’ s biggest shareholders   with stakes totaling 1 . 4 percent of all listed companies . In recent years the world ’ s biggest sovereign wealth fund has become a more active shareholder   trying to influence companies ’ attitudes . Among them are the way companies report on climate change   such as their carbon dioxide emissions   or whether companies have scenario analyses of how more heatwaves   droughts or floods might affect their earnings .  Chief Executive Yngve Slyngstad  said the fund would first focus  its  efforts on electricity producers . “ That is ... the sector that we will first go through and think about in this scenario . The two next ones will be ( basic ) materials and oil .” “ By far the largest ... is electricity producers   which of course has been a specific focus for us because of the so - called coal criteria  ” he said referring to the fund not being allowed by parliament to invest in firms that derive more than 30 percent of their revenue from coal . The proposal to potentially exclude one or more companies in the oil   steel or cement sectors over excessive greenhouse gas emissions is under review by the board of the central bank . “ We have received some recommendations on potential exclusions based on that new criteria . The board is working on the issues ... It ’ s not going to be long  ” central bank governor Oeystein Olsen said   declining to give a more precise timeframe . Slideshow ( 2 Images ) The moves come as the fund is proposing to drop oil and gas stocks from its benchmark index   which would reduce over time its stakes in oil and gas companies . That proposal is under consideration at the finance ministry and will be voted by parliament at a later stage . DOUBLED ITS RETURN IN 2017 Also on Tuesday   the fund said it doubled its return on investment in 2017   beating its benchmark   as strong global stock markets boosted the value of the portfolio . It earned a return of 13 . 7 percent in 2017   up from 6 . 9 percent in 2016 . “ The fund ’ s cumulative return since inception has passed 4   000 billion Norwegian crowns ($ 511 billion ). One out of four crowns of return was generated in 2017   after a very strong year for the fund  ” Slyngstad said in a statement . “ Again   our equity investments returned strongest with a return close to 20 percent .” The fund ’ s biggest single company investment at the end of 2017 was in Apple Inc ( AAPL . O )  worth 66 billion crowns   ahead of Nestle ( NESN . S ) at 51 billion and Royal Dutch Shell ( RDSa . L ) at 50 billion . Apple was also the biggest single contributor to the fund ’ s returns in 2017   ahead of Chinese tech group Tencent Holdings ( 0700 . HK ) and Microsoft ( MSFT . O ). The fund ’ s size is equivalent to $ 200   000 for every Norwegian man   woman and child . The government withdrew 61 billion crowns during 2017 to pay for public expenses   compared with 101 billion crowns in 2016 .  Slyngstad  earned an annual salary of 6 . 7 million crowns   or roughly $ 855   000   in 2017   while  his  chief investment officer for equity strategies   Petter Johnsen   earned more   with 7 . 4 million crowns . By comparison   the country ’ s prime minister   Erna Solberg   earned 1 . 6 million crowns .
Norway ’ s $ 1 trillion sovereign wealth fund will this year step up its assessment of the risks posed by climate change to its investments in power producers   oil firms and basic materials companies   its CEO told Reuters on Tuesday . Separately   the board of the central bank will soon decide whether to blacklist from the fund one or more companies -- either in the oil   steel or concrete sectors -- for producing too much greenhouse gases   the central bank chief told Reuters . The fund   which invests the proceeds from Norway ’ s oil and gas production for future pensions in stocks   bonds and real estate abroad   is one of the world ’ s biggest shareholders   with stakes totaling 1 . 4 percent of all listed companies . In recent years the world ’ s biggest sovereign wealth fund has become a more active shareholder   trying to influence companies ’ attitudes . Among them are the way companies report on climate change   such as their carbon dioxide emissions   or whether companies have scenario analyses of how more heatwaves   droughts or floods might affect their earnings .  [TGT]said the fund would first focus  its  efforts on electricity producers . “ That is ... the sector that we will first go through and think about in this scenario . The two next ones will be ( basic ) materials and oil .” “ By far the largest ... is electricity producers   which of course has been a specific focus for us because of the so - called coal criteria  ” [TGT] said referring to the fund not being allowed by parliament to invest in firms that derive more than 30 percent of their revenue from coal . The proposal to potentially exclude one or more companies in the oil   steel or cement sectors over excessive greenhouse gas emissions is under review by the board of the central bank . “ We have received some recommendations on potential exclusions based on that new criteria . The board is working on the issues ... It ’ s not going to be long  ” central bank governor Oeystein Olsen said   declining to give a more precise timeframe . Slideshow ( 2 Images ) The moves come as the fund is proposing to drop oil and gas stocks from its benchmark index   which would reduce over time its stakes in oil and gas companies . That proposal is under consideration at the finance ministry and will be voted by parliament at a later stage . DOUBLED ITS RETURN IN 2017 Also on Tuesday   the fund said it doubled its return on investment in 2017   beating its benchmark   as strong global stock markets boosted the value of the portfolio . It earned a return of 13 . 7 percent in 2017   up from 6 . 9 percent in 2016 . “ The fund ’ s cumulative return since inception has passed 4   000 billion Norwegian crowns ($ 511 billion ). One out of four crowns of return was generated in 2017   after a very strong year for the fund  ” Slyngstad said in a statement . “ Again   our equity investments returned strongest with a return close to 20 percent .” The fund ’ s biggest single company investment at the end of 2017 was in Apple Inc ( AAPL . O )  worth 66 billion crowns   ahead of Nestle ( NESN . S ) at 51 billion and Royal Dutch Shell ( RDSa . L ) at 50 billion . Apple was also the biggest single contributor to the fund ’ s returns in 2017   ahead of Chinese tech group Tencent Holdings ( 0700 . HK ) and Microsoft ( MSFT . O ). The fund ’ s size is equivalent to $ 200   000 for every Norwegian man   woman and child . The government withdrew 61 billion crowns during 2017 to pay for public expenses   compared with 101 billion crowns in 2016 .  Slyngstad  earned an annual salary of 6 . 7 million crowns   or roughly $ 855   000   in 2017   while  his  chief investment officer for equity strategies   Petter Johnsen   earned more   with 7 . 4 million crowns . By comparison   the country ’ s prime minister   Erna Solberg   earned 1 . 6 million crowns .