The fund has made sustainable investing a more explicit strategy since Nicolai Tangen took over as chief executive late last year. With a portfolio of about 9,000 stocks, the world’s biggest owner of publicly traded companies intends to base future investment decisions on the results of a new ESG pre-screening process.
Based on that model, the fund said it’s already blacklisted nine companies that would otherwise have automatically been added to its portfolio based on the benchmarks it follows. A further 65 firms have been identified as posing similar sustainability risks, it said, without naming the companies.
Tangen said in a recent interview that the degree to which ESG dictates a company’s prospects is “starting to hit now.”
Risk-based divestments mainly affect smaller companies where efforts to engage don’t pay off, Ihenacho said. The fund screens for a range of ESG risks including climate change, ocean sustainability, children’s rights, human rights, tax and transparency, anti-corruption, water management and lately also biodiversity.
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Built from Norway’s North Sea oil and gas riches, the fund exited over 30 companies last year, based on an assessment of their sustainability risks. It doesn’t publish the names of the companies from which it divests. The ESG filter is different from divestment recommendations made by Norway’s ethics council, which are made irrespective of financial considerations.
Photo: Bloomberg
