Norges Bank Investment Management (NBIM) has detailed its work on responsible investment over the past year, including its 366 divestments since 2021.

Publishing its eighth report on responsible investment, the fund said that it has strengthened its expectations of companies and followed up through dialogue.

NBIM, which is responsible for the investment of the Government Pension Fund Global (GPFG), said it has had high activity in its work on responsible investment throughout the year. Its primary tool is to influence companies through dialogue and voting.

Despite this, in 2021 NBIM carried out risk-based divestments in 52 companies and, in total, carried out divestments in 366 companies since 2021.

“For a long time, we have had expectations relating to the climate. In 2021, we made it clear that the companies should have a climate plan with goals of emission reductions in line with the Paris Agreement. We also published new expectations of how the companies should take biodiversity and ecosystems into account in their operations,” NBIM chief governance and compliance officer, Carine Smith Ihenacho, said.

In addition, NBIM has increasingly developed better methods for identifying companies with high risk relating to the environment, social conditions, and corporate governance. In particular, it has considered companies exposed to risk relating to biodiversity, workers’ rights, tax and transparency, and corruption.
When dialogue is not successful, NBIM said risk-based divestment might be appropriate. The number of risk-based divestments in 2021 is the second-highest it has had since it started doing this.

Last year, NBIM also started reviewing the sustainability risk in companies before they become part of its benchmark index, so that it can refrain from investing in high-risk companies. NBIM chose to refrain from investing in nine companies that were added to the index in course of the year.

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