Norway's massive sovereign-wealth fund sets net-zero goals

Norway's sovereign-wealth fund announced this week that it aims to have every company in its vast portfolio reach net-zero greenhouse gas emissions by 2050.

The fund, the Norges Bank Investment Management, is one of the world's largest sovereign-wealth funds, boasting over $1.2 trillion in assets. It holds a stake in more than 9,000 companies in 70 countries.

”Our goal is to be the world’s leading investor in terms of how climate risk is managed,” Nicolai Tangen, the fund’s CEO, said in a statement. “Our long-term return will depend on how the companies in our portfolio manage the transition to a zero emissions society.”

The announcement is part of a larger climate action plan that aims to get those companies in which the fund invests to operate in accordance with the Paris Agreement, a global commitment to combat the climate crisis. Experts maintain that global emissions need to reach net-zero by 2050 in order to keep global warming below 1.5°C compared to preindustrial levels—the primary goal of the Paris accord.

Since its inception in the 1990s, Norway’s wealth fund has invested the country’s enormous oil and gas revenue widely across the world and across economic sectors. Today, the fund holds nearly 1.5% of all shares within listed companies globally.

"We set a target of net zero emissions by 2050 at the latest for all companies," said Carine Smith Ihenacho, the fund’s chief governance and compliance officer. "We will engage with the companies to reach this target by setting credible preliminary targets and creating plans to reduce their direct and indirect emissions of greenhouse gases."

The fund’s push for net-zero targets comes after the Norwegian government publicly urged the fund in April to adopt zero-emission goals.

The embrace of net-zero targets has significantly increased in recent years.

In July, the World Economic Forum unveiled a new Net-Zero Industry Tracker, which established robust tracking mechanisms to support the emergence of low-carbon industrial sectors by 2030.

Today, industrial sectors—namely steel, cement, oil and natural gas, among others—account for nearly 40% of global energy consumption and more than 30% of global greenhouse gas emissions. The tracker aims to help the high-carbon sectors reach net-zero by 2050.