A group of 34 economists and academics have signed a letter urging the Norwegian government and parliament to sign up the country’s Government Pension Fund Global (GPFG) to a net-zero goal.
The letter was published on the Official Monetary and Financial Institutions Forum (OMFIF) with a list of signatories.
“As leading economists and experts from around the world, we have come together to urge the Norwegian government and parliament to sign up the GPFG to Net Zero,” the letter stated.
Currently, through membership in the United Nations-convened Net Zero Asset Owner Alliance, 42 institutional investors, representing USD 6.6tn assets under management, have committed to net-zero goals with the first targets set for 2025.
Meanwhile, 128 asset managers, representing USD 43tn assets under management, have joined the Net Zero Asset Managers Initiative, to support investing aligned with net-zero emissions by 2050 or sooner.
The signatories have criticised the GPFG, which is managed by Norges Bank Investment Management (NBIM) for focusing on climate risk rather than climate impact. The letter states that the GPFG’s equity portfolio carbon footprint of 107.6m tonnes of CO2 equivalents (MtCO2e, 2019) is more than twice the amount of Norway’s annual total emissions, and triple when excluding Norway’s emissions during oil and gas extraction.
“The Norwegian economy, due to its concentration in the oil and gas sector, is highly exposed to climate transition risk. A share of GPFG’s portfolio assets is emissions-intensive and therefore highly exposed, increasing the overall transition risk to Norway’s productive and financial assets,” they wrote.
They believe that a commitment by the GPFG to net zero would be a “significant step towards the achievement of the objectives in the Paris agreement”. GPFG is also a highly influential investor, and its adherence would set an important precedent for other sovereign funds, the letter stated.
“We urge the Norwegian government and the Storting (parliament) to take the opportunity of COP26 to announce the GPFG’s membership of the Net Zero Asset Owner Alliance,” the letter concluded.
NBIM has been contacted by European Pensions for a comment but is yet to respond.
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