Norway wealth fund to push firms to have net-zero targets, government says

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  • Norway SWF is world's largest
  • To stress-test portfolio in a +1.5C scenario

OSLO, April 1 (Reuters) - Norway's $1.3 trillion wealth fund, the world's largest, should push the 9,300 companies it invests in to adopt net-zero carbon emissions targets, the finance ministry proposed on Friday, in another example of a top investor adapting to climate change.

The move comes after a government-appointed commission said in August the fund should push firms it holds stakes in to eventually cut their greenhouse gas emissions to nil by 2050, in line with the Paris Agreement. read more

The fund will also stress-test its portfolio, including in a scenario where global temperatures rise by 1.5 degrees Celsius, the ministry said in its annual recommendation to parliament.

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The goal of the Paris accord was to limit warming to 1.5C above pre-industrial levels.

"The government wants to make the (fund) world-leading in responsible investment and the management of climate and nature risks," Finance Minister Trygve Slagsvold Vedum said in a statement.

The fund pools the Norwegian state's revenues from oil and gas production and invests them abroad in stocks, bonds, property and renewable energy projects. Its current size is equivalent to $245,000 for every Norwegian man, woman and child.

It is invested in more than 9,300 companies globally and owns on average 1.3% of all the world's listed stocks.

Norway's minority government needs the support of other parties in parliament to pass its proposals.

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The government's proposal stressed the fund should engage with companies to cut their greenhouse gas emissions, rather than divest from them, in line with what the central bank, which manages the fund, has said. read more

"Responsible investment and active ownership will be of key importance in climate risk management, the government said.

It also stressed that managing the climate risk in the fund's portfolio did not trump its main goal of seeking "the highest possible return with an acceptable level of risk".

"The key to reducing climate risk is an effective and predictable climate policy. This falls outside the responsibilities of the (fund) as a financial investor," the government said.

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Reporting by Gwladys Fouche, editing by Terje Solsvik and Alex Richardson

Our Standards: The Thomson Reuters Trust Principles.

Thomson Reuters

Oversees news coverage from Norway for Reuters and loves flying to Svalbard in the Arctic, oil platforms in the North Sea, and guessing who is going to win the Nobel Peace Prize. Born in France and with Reuters since 2010, she has worked for The Guardian, Agence France-Presse and Al Jazeera English, among others, and speaks four languages.