World's largest sovereign wealth fund demands carbon neutrality by 2050

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The largest sovereign wealth fund in the world demands carbon neutrality by 2050

Since 1996, Norway has set aside its oil revenues in a sovereign wealth fund.

The largest sovereign wealth fund on the planet, that of Norway, will require the 9,000 companies in which it has invested in the world to achieve net zero emissions of carbon by 2050, he announced on Tuesday.

We are setting a goal of net zero emissions by 2050 at the latest for all companies, said Carine Smith Ihenacho, director of governance and compliance at the fund, presenting the new climate plan of the fund. huge woolen stocking.

We will engage with companies to achieve this objective by setting credible preliminary objectives and putting in place plans to reduce their direct and indirect greenhouse gas emissions. greenhouse effect, she added in a press release.

According to UN climate experts (IPCC), achieving carbon neutrality by 2050 is a sine qua non for limiting global warming to 1.5 °C in line with Paris Agreement goals.

Paradoxically fed by oil revenues from the Norwegian state, the fund, which today weighs more than 12,000 billion crowns (nearly 1,200 billion euros), is present in the capital of more than 9,000 companies in 70 countries.

To date, only around 10% have set a carbon neutral target.

The fund now aims to support them so that they adopt a climate plan: it will maintain a dialogue with them, use its right to vote at general meetings and, as a last resort, disengage of their capital, Ms. Ihenacho explained at a press conference.

The fund is governed by ethical rules which notably prohibit it from investing in companies guilty of serious environmental or climatic damage and in coal, but it can also on its own initiative exclude dunces in this area on purely financials.

Sustainability is a condition for good returns in the future, noted Øystein Børsum, the vice-governor of the Bank of Norway, which heads the fund.

For the time being, it has left the capital of four companies whose greenhouse gas emissions, responsible for climate change, were considered excessive.

In addition to the equivalent of 1.3% of global market capitalization, the Norwegian fund is invested in bond investments, real estate and development projects. #x27;unlisted renewable energy.

By unveiling this new climate action plan, it complies with a decision by the Norwegian Parliament which earlier this year set this goal of net zero emissions. by 2050.

In the first half of the year, the fund lost 1680 billion crowns due, in particular, to market turbulence.

The only sector that posted a positive return was energy, which includes oil and gas companies and benefited from the surge in prices in the wake of the war in Ukraine.

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