we have holdings in 9, 000 companies in 70 countries. and we are a long - term investor. since only the real return can be spent by the government, the fund could, in principle, last forever. 1 / 6 bis central bankers'speeches put simply, the strategy for the fund is to strike the best balance between expected return and risk by spreading our investments far and wide and owning a little of everything in the market. there is a solid body of research to support such an approach. how climate risk is relevant to the fund what does this approach to managing the fund mean for the fund ’ s climate risk? with a wide spread of investments, we are protected against events that affect specific companies or sectors. but we cannot protect ourselves against events or trends that affect everyone. the fund is exposed to two kinds of climate risk : physical risk and transition risk. transition risk is about how the companies we invest in handle the transition to a low - carbon economy. the size of this challenge differs widely between sectors and companies. chart : transition risk and the fund the fund ’ s equity investments can be categorised by transition risk as measured by analysis firm msci. the blue columns in the chart show each category ’ s share of the value of the portfolio. the white columns show their emissions. companies in the “ transition ” category have high emissions and therefore need to make the biggest changes. these make up 14 percent of the equity portfolio. the remainder are companies considered either to have neutral exposure or to contribute positively to the transition. these last companies are therefore part of the solution. 1 physical risk is linked more directly to climate change. the most obvious example is acute events such as extreme weather, but more gradual changes such as higher temperatures, droughts and rising sea levels may also impact individual investments, both negatively and positively. in a scenario where the world fails to transition to a low - carbon economy, the risk increases, including for the fund, because the consequences of large - scale climate change will be felt everywhere. as an investor in equities, bonds and real assets, we have investments in everything from real estate and infrastructure to forestry and food production. all of these investments could be hurt by changes in the environment such as heatwaves, floods or fires. we own a little of everything. for a large, long - term, global fund, there will be nowhere to hide. climate risk is an important long - term risk that the fund needs to address. what

of the krone. the latter would be the least painful channel, and with a flexible exchange rate it is also the most likely. final remarks to sum up, increased globalisation and the ensuing terms of trade improvements have exposed the norwegian economy to a significant upward income shock. this has amplified the domestic upswing. so far, however, strong growth impulses have not led to major imbalances in the labour market or strong upward wage and price pressures. this may be seen as an indication that our fiscal and monetary policy guidelines have been quite successful so far in shielding the norwegian economy from excessive fluctuations. in principle, these policy guidelines are just as appropriate for coping with favourable periods as with adverse periods. we will face another test of the macroeconomic framework when the terms - of - trade change is reversed and the gains either fully or partly dissipate. structural policies aimed at maintaining flexibility in labour, capital and goods markets are, however, probably more important than stabilisation policy to sustain both high growth and economic stability in the future. developments in labour productivity over the last two decades may be an indication of the importance of structural policies. norway has managed to sustain productivity growth at a high level. restructuring in the norwegian economy in the 1990s, changes in the tax system, broader and deeper financial markets, and deregulation in trade and service markets appear to have resulted in a more efficient use of resources. many of these changes were advocated by victor norman in the 1980s and early 1990s. for example, in 1991 he chaired an official committee 5 exploring possible efficiency gains in the government sector. in the report, high possible efficiency gains were envisaged as a consequence of the committee ’ s proposals, including a better functioning labour market. victor ’ s conviction as to what economic policy can accomplish can be illustrated by the following quote from the committee ’ s report : " we believe that in principle it should be possible to once again reduce unemployment in norway to one per cent without creating permanent pressures and restructuring problems in the economy. " thank you for your attention! see nou 1991 : 28, ” mot bedre vitende? effektiviseringsmuligheter i offentlig sector ” ( only available in norwegian ).