The Norwegian sovereign wealth fund divested 73 companies last year due to environmental or governance concerns, with a company’s level of carbon emissions responsible for the largest share of equity sales.

Arguing that companies with high carbon emissions, either as a direct result of their operations or due to activities of their supply chain, were at greater regulatory risk than lower-emitting companies, the NOK7.1trn (€733bn) Government Pension Fund Global sold its stakes in 42 firms.

The divestment brings to 66 the number of companies sold due to their carbon footprint and sees the category account for more than one-third of the 187 companies excluded by Norges Bank Investment Management (NBIM) on risk grounds.

Companies were also excluded due to their business activities leading to deforestation, or the business model being exposed to the risk of increasing water prices, while the risk of corruption led to the exclusion of five companies.

In the foreword of NBIM’s second responsible investment annual report, chief executive Yngve Slyngstad said it expected companies to address a “broad array of risks” in its business plans.

“We urge the companies we invest in to think long term,” he added. “They should build sustainable strategies and business models that are profitable over time.”

As part of its engagement efforts, NBIM voted on more than 112,00 resolutions during 2015 and had 3,500 company meetings.

It also noted a victory for its attempts for improved proxy access to US companies, saying that approximately one-quarter of its US equity holdings had amended by-laws allowing for proxy nominations for alternative board candidates.

Coming alongside the publication of the responsible investment report, NBIM also detailed its approach to human rights, and how it expected companies in which it invested to tackle the matter.

The document added: “Boards should ensure the company has a policy to respect human rights and that relevant measures are integrated into corporate business strategy, risk management and reporting.”