Last Tuesday, Norway’s $1.2 trillion dollar investment fund announced plans to push the companies it invests in to reach net zero emissions by 2050. The fund is one of the world’s largest investors, and owns an average of 1.3% of all listed global stocks. The move follows a proposal by Norway’s finance ministry that the fund should push the 9,000+ companies it has stakes in to reduce their emissions to align with the Paris Agreement’s goal of limiting atmospheric warming to no more than 1.5 degrees Celsius (Reuters). 

To help them reach this target, the fund is calling on the companies to develop credible transition plans and to be more transparent in their emission performance reporting (Bloomberg). It will prioritize placing pressure on the 174 firms in its portfolio that account for 70% of the fund’s Scope 1 and Scope 2 emissions (Bloomberg, Reuters). It will continue to invest more in renewable energy companies and projects (New York Times). 

The fund also plans to divest from companies that continue to lag on climate targets or have unmitigated climate risks (New York Times). But fund CEO Nicolai Tangen noted that selling high-emitting companies to other investment groups will not necessarily help emission reduction goals: "The easy way to cut down emissions is to sell out. But someone needs to own these companies and it does not solve the problem, quite the contrary” (Reuters).