Norway – Sovereign Wealth Giant & Activist Investor Focused on Corporate Sustainability & Responsibility

Posted on February 11, 2016 by Hank Boerner – Chair & Chief Strategist

#Corporate Responsibility #Corporate Sustainability #ESG Issues #Investor Engagement #Shareowner Activism #SRI #Sustainable Investing 

Many nations have created what can be defined as a “Sovereign Wealth Fund,” which hold assets in portfolio that are supposed to benefit the entire population, and usually, future generations of the country’s citizens. The first such fund was launched in 1954 by the oil-producing nation of Kuwait.  Today, the largest such “SWF” is that of Norway – officially, the Norway Government Pension Investment Fund – with “wealth” now approaching US$1 trillion in Assets Under Management.
The Fund, managed by Norges Bank, invests in literally thousands of public companies.  Consider:  The fund invests in 9,000 companies in 75 countries (1.3% of the world’s listed companies; 2.4% of Europe’s listed companies).  The funds come from Norway’s North Sea oil royalties.
This is an activist investor:  Last year the SWF divested shares in 73 companies because of environmental and governance issues – the news comes from the Fund’s second annual sustainable investing report.  The Norway SWF is an activist investor, voting against 9,000 company-backed proxy resolutions (including votes at Apple, ExxonMobil, Sanofi, Anheuser-Bush InBev, Toyota, and General Electric).
As the Financial Times’ Nordic & Baltic reporter Richard Milne explains in his report, “The disclosures come as part of the oil fund’s second report on responsible investing…detailing its aspiration to use its growing weigh in financial markets to push companies towards good corporate behavior.”
The G&A Institute team has been monitoring SWFs for almost 10 years, as the assets – and influence — of this important sector of the institutional investment community grows and grows.  Not many SWFs could be characterized as sustainable & responsible investors, but the Norway fund example is at least favorably referenced by some other national funds when they describe their own “sustainable investing” activities.
Collectively, the SWF community owned/managed US$7 trillion in AUM as of December 2015, according to the Sovereign Wealth Funds Institute.   (Norway Fund was $825 billion; Abu Dhabi, long the largest SWF, was at $773 billion.)
Other large SWFs are owned by governments of China; Korea; Qatar (and other oil-producing states).  Oil – fossil fuel, legacy fuel – is an important factor in building this type of national wealth.  Norway’s fund states:  “The [Fund] is saving for future generations in Norway. One day the oil will run out, but the return on the fund will continue to benefit the Norwegian population.”
G&A’s SustainabilityHQ web platform tracks the activities of the world’s SWFs and presents headlines of fund activities. The profiles of the SWFs is part of our asset owner/manager profiling resources (part of G&A’s “Big Data”) used for customized research for clients.  Norway is our north star — look at what this Nordic giant is doing and “imagine” in John Lennon’s terms, what might be if many other SWFs followed its lead in responsible investing!
Read more about the Norway Sovereign Wealth Fund in the story below. And tune in to SWFs – we track news of this category of asset owner/manager every day using our SHQ platform tools.
Norway’s oil fund sells 73 stakes on sustainability concerns
(Thursday – February 04, 2016)
Source: – Norway’s $810bn oil fund sold out of 73 companies last year due to environmental and governance issues as the world’s largest sovereign wealth fund stepped up its work on responsible investing.