Norway’s $2 trillion sovereign wealth fund — the world’s largest — has reaffirmed its commitment to pushing portfolio companies towards net-zero emissions by 2050, even as a backlash against climate-focused investing grows in the United States.
In an updated climate action plan released on Wednesday, the fund said it would intensify scrutiny of corporate lobbying related to climate change and could vote against company boards that fail to align with its climate expectations. It also indicated a readiness to file shareholder proposals to press for greater transparency and action.
“Climate risk is financial risk,” the report stated. “The fund therefore has an interest in an orderly transition to global net-zero emissions.”
The fund, managed by Norges Bank Investment Management (NBIM), first set the goal in 2022 of aligning all 8,500 companies in its portfolio with the Paris Agreement. The latest update signals a firmer stance at a time when some global investors are scaling back environmental, social and governance (ESG) commitments.
The renewed push contrasts sharply with political developments in the United States, where President Donald Trump has prioritised fossil fuel expansion, rolled back domestic climate policies, and withdrawn from international climate accords.
The Norwegian fund, which manages revenue from the country’s oil and gas sector, has roughly half of its assets — about $1 trillion — invested in U.S. equities, bonds and real estate.
Fund CEO Nicolai Tangen acknowledged the risk of U.S. backlash but said the strategy would proceed.
“It’s our money, and we have to safeguard our investments the way we see fit,” Tangen told the media.
Sustainability advocates welcomed parts of the plan, particularly the stronger focus on corporate lobbying.
“The fund’s commitment to increased scrutiny of corporate policy advocacy as it relates to climate change is new and very welcome,” said Brynn O’Brien, Executive Director of the Australasian Centre for Corporate Responsibility, noting that the ability to vote against boards represented a meaningful escalation.
However, others criticised the lack of a clear strategy for companies unwilling to align with the fund’s climate goals.
“The real test for the fund is how they deal with companies not willing to meet expectations,” said Diego Foss, Programme Co-Lead at the Nordic Center for Sustainable Finance. “Sadly, the plan is almost devoid of any strategy to influence those companies still unwilling to transition.”
Responding to such concerns, the fund reiterated that engagement, not divestment, remains its primary approach.
“Engagement is our main tool. Divestment does not take down emissions,” said Carine Smith Ihenacho, Chief Governance and Compliance Officer at NBIM, during the plan’s launch.
The climate plan operates separately from the fund’s ethical guidelines, which are defined by Norway’s parliament and continue to guide decisions on exclusions and divestments.
