The world’s largest sovereign wealth fund, managed by Norges Bank Investment Management (NBIM) on behalf of the Norwegian government, has reinforced its commitment to driving its portfolio companies toward net-zero greenhouse gas emissions by 2050. With assets around US$2 trillion, the fund’s updated climate plan outlines a deeper, more systemic approach to tackling climate risk and embedding sustainability into its investment and ownership functions.

Key enhancements include an expanded focus on companies with large Scope 3 emissions, those generated across the entire value chain, in addition to the previously targeted Scope 1 and Scope 2 emissions. The fund will engage more intensively at the board level with high-emitting companies, scrutinizing their transition plans, corporate lobbying on climate issues, and overall resilience to physical climate impacts. It has flagged the possibility of voting against company boards or filing shareholder proposals when firms fail to demonstrate credible climate action.

NBIM’s revised approach emphasizes three levels of climate work: market, helping raise standards and disclosures across industries, portfolio, assessing and managing climate-related risk across the fund’s holdings, and company, active engagement, voting, and possible divestment when warranted. The fund frames climate risk as financial risk, signaling that unsound climate strategies may impair long-term returns and hamper resilient investment performance.

These developments arrive amid a contrasting global backdrop: while the fund is doubling down on climate responsibilities, some major jurisdictions are moving in the opposite direction, reducing climate regulation or stepping back from ambitious net-zero commitments. The Norwegian fund’s insistence on maintaining and heightening climate-related expectations illustrates how some institutional investors are now positioning themselves as guardians of the transition.

For companies in the fund’s portfolio and the broader investment community, the message is clear: climate-aligned transition plans are no longer optional. Firms must articulate credible pathways to net zero, with measurable targets, transparent disclosures and executive accountability, or risk friction with one of the most influential global investors. In short, NBIM’s updated climate strategy signals a strong escalation, from encouragement to enforcement, of corporate climate alignment across its US$2 trillion global footprint.

Source:

https://onestopesg.com/esg-news/norway-s-2-trillion-sovereign-fund-strengthens-climate-action-plan-to-drive-net-zero-transition-by-2050-1761838227899