Norges Bank Investment Management (NBIM), the investment manager for Norway’s $1.4 trillion oil fund announced the publication of its 2030 Climate Action Plan, outlining its updated investment and engagement approach to managing the financial risks and opportunities arising from climate change, and to support its mandate to have portfolio companies organize their activities to be compatible with global net zero emissions by 2050.
The updated plan focuses on more closely ties NBIM’s investment and climate goals, introduces an increased focus on physical climate risk and nature loss, and expands the fund’s engagement focus to a broader set of portfolio companies and topics, including climate resilience, nature and corporate policy advocacy.
NBIM was established to manage revenues from Norway’s oil and gas resources. The fund has grown to become the world’s largest sovereign wealth fund, owning approximately 1.5% of all shares in the world’s listed companies, with holdings in around 8,500 companies globally.
The publication follows the release in 2022 of NBIM’s original 2025 Climate Action Plan, which included a target to reach net zero emissions for all companies in the fund by 2050, and a pledge to set climate-related expectations for companies in its portfolio, including a requirement to set net zero goals. The fund published its climate-related expectations for portfolio companies last year, which included requirements to disclose value chain emissions, report on climate risks, and implement transition plans. The 2022 plan also included an “engage-to-change” approach, with the fund establishing an engagement focus list including companies representing 70% of its equity portfolio’s financed scope 1 and scope 2 greenhouse gas emissions.
To date, NBIM said that it has interacted with companies representing 71% of its financed emissions, voted against directors at 69 companies for inadequate climate risk management, divested from 44 companies based on climate risk considerations, and increased the portion of total portfolio companies’ emissions covered by science-based net zero targets to 76% from 57%.
The new publication extends NBIM’s climate action plan to 2030, and focuses on a series of key strategi priorities, including strengthening the links between its investment objectives and its work on climate change across risk management, investment and ownership functions, continuing to engage with companies on net zero targets and climate transition plans, and enhancing the fund’s focus on nature, physical climate risk, adaptation and resilience.
NBIM’s climate plans focus heavily on engagement with portfolio companies, with CEO Nicolai Tangen describing “engagement-led action to support and challenge our portfolio companies to transition their business models to net zero emissions by 2050” as “the heart of our efforts.”
Accordingly, NBIM’s new plan includes a series of changes to its company-level actions, including expanding its climate focus list to include companies with the highest Scope 3, or value chain, emissions, as well as companies with heightened vulnerability to physical climate and nature risk, in addition to those representing 70% of Scope 1 and 2 emissions. The investment manager also plans to increase its emphasis on physical climate risk, adaptation and resilience and the intersection with nature in company engagements, and to also increase scrutiny of the intersection of climate change and corporate policy advocacy.
NBIM also said that it plans to update its company expectations to reflect its increased focus on physical climate risk, adaptation, resilience and nature as well as on corporate policy advocacy.
Additional key priorities outlined in NBIM’s plan include strengthening market-level standards and methodologies for climate and nature-related financial disclosures, target-setting and scenario analysis, and embedding AI and proprietary analytics in its management of climate risk.
Tangen said:
“Climate risk is financial risk. Our long-term returns depend on how the global economy manages physical climate risk and the energy transition. The global economy cannot outrun climate change, so neither can our investments.”
Click here to access NBIM’s 2030 Climate Action Plan.
