øystein olsen : management of the government pension fund global introductory statement by mr øystein olsen, governor of norges bank ( central bank of norway ), at the hearing before the standing committee on finance and economic affairs of the storting, oslo, 3 may 2021. * * * please note that the text below may differ from the actual address. i would like to thank the committee for the invitation to speak on the bank ’ s management of the government pension fund global ( gpfg ). norges bank manages the gpfg with the objective of achieving the highest possible return over time within the limits of the investment mandate defined by the ministry of finance. the gpfg is to be managed within an adequate control and risk management framework and in a responsible and efficient manner with a high degree of transparency. the gpfg is managed to track the benchmark index fairly closely, ie the return largely tracks the return on the benchmark index. the benchmark index is defined by the ministry of finance and endorsed by the storting. however, even though norges bank closely tracks the gpfg ’ s benchmark index, many large and small choices have to be made every day. these choices are based on a clear mandate from the authorities and a well thought - out investment strategy. the year 2020 was a special year for us all, including the gpfg. as for many others, working conditions during the covid - 19 pandemic have been demanding. the rapid spread of the pandemic in march 2020 also led to wide, abrupt swings in financial markets. the global composite equity index fell by 20 percent in 22 days. however, markets recovered rapidly, and by the second quarter the gpfg had posted one of its best ever quarterly results. for the year as a whole, the gpfg ’ s investments posted an overall return of 10. 9 percent before management costs. the return was 0. 27 percentage point higher than the return on the benchmark index the gpfg ’ s performance is measured against. the executive board is pleased that a solid excess return was achieved in a turbulent year. the positive trend has continued, and the return on the gpfg in the first quarter of 2021 was 4 percent. the gpfg ’ s performance must be assessed over time. the executive board is satisfied that the return over time has also been good. the substantial market fluctuations in 2020 nevertheless serve as a reminder that the return on

##listed renewable energy infrastructure, ie a 50 percent stake in the world ’ s next largest offshore wind farm off the dutch coast. unlisted renewable energy infrastructure is still a relatively new area for norges bank. we intend to build up the portfolio gradually, primarily through investments in wind and solar power. we will prioritise investments that contribute to improving the overall risk - return tradeoff in the gpfg. management of the gpfg is to be cost - efficient, and the executive board monitors cost developments closely. earlier this month, norges bank announced a revised strategy describing how we will fulfil the investment mandate ahead. the strategy plan expresses our ambitions and our overall aim of achieving the highest possible return after costs. our ambitions are high. as they should be. nonetheless, we still aim to be a small, flexible and cost - efficient organisation. 2 / 2 bis central bankers'speeches