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Norway’s Government Pension Fund not addressing climate change
23 September 2008

Written by Sophie Baker

Norway’s Government Pension Fund has neglected to apply best practice in sustainable investments and is not yet fully addressing the impacts of global warming, according to the World Wildlife Fund, Norway (WWF-Norway).

The fund, which is based on petroleum revenues, is currently estimated at $381bn, and is the world’s second largest sovereign wealth fund. More than one per cent of all European stocks are owned by Norway’s Government Pension Fund.

Rasmus Hansson, CEO of WWF-Norway, commented: “Loaded with petroleum cash, Norway has a special responsibility in low carbon development and to help mitigate impacts from global warming on hundreds of millions of the world’s poor.

“The Norwegian Government is currently revising the ethical guidelines for the fund and now has a unique opportunity to introduce more progressive instruments for sustainable investment, such as positive screening and a climate technology investment fund.”

Key public investment funds have been ranked in the report, taking the application of leading edge tools for sustainable investments, particularly in terms of addressing climate change, into account. Public pension funds such as ABP Netherlands and CalPERS (the California Public Employees’ Retirement System) are leading the way.

“Socially responsible investment can no longer be seen as a purely ethical exercise that reduces profit while doing good,” said Karina Wong, senior consultant at Innovest and lead-author of the report. “Rather, in an increasingly resource restricted world sustainable business models are a crucial indicator for long-term profitability and risk reduction.”

More positively, however, is the finding that China’s sovereign wealth fund CIC has recently announced that it will invest in environment-friendly technologies. “WWF will now explore the possibilities for the world’s largest sovereign wealth funds, Norway, UAE, Saudi Arabia, Singapore, Kuwait and China, to take a lead in implementing and developing further the investment practices and tools needed for a low carbon development in the 21st Century,” added Dennis Pamlin, global policy advisor in the WWF.

The full report can be downloaded here.