Norway’s $960B wealth fund to request banks to disclose carbon footprint of loans

OSLO Norway’s US$960-billion sovereign wealth fund will ask the banks in which it has invested to disclose how their lending contributes to greenhouse gas emissions, its chief executive said Friday.

The world’s largest wealth fund, which is managed by Norges Bank Investment Management and invests in stocks, bonds and real estate outside Norway, has in the past measured the carbon footprint of its investments in equities and bonds.

“The third level is to look at the banks,” CEO Yngve Slyngstad said. “What kind of loans do they have and how are their loan books specifically exposed to this issue? In practice that will mean the corporate loan books.”

The financial industry is the biggest single sector in the fund, known as the Government Pension Fund Global, accounting for 23.8 per cent of its equity portfolio.

Holdings include Credit Suisse, Deutsche Bank, HSBC, Citigroup, Wells Fargo, Barclays and Nordea, among others. In total it is invested in close to 9,000 firms worldwide.

“Going into project specifics I don’t think is within the scope for us within the next few years. But the overall direction of their policies is something that we expect to come,” Slyngstad said.

The fund, along with other investors such as BlackRock, is pushing firms to disclose both their carbon emissions and their plans to handle the risk of climate change.

The Norwegian fund sends its expectations on these issues to the boards of companies it has stakes in and holds meetings to ensure its views are heard.

“In 2017, we will have more than 4,000 company meetings. Last year, nearly half of the meetings raised the issue in the environmental, social and governance area,” he said, adding that most meetings would be with CEOs and some with chairmen.