Norges Bank Investment Management (NBIM) will strengthen the relationship between its climate, risk management and investment functions, it has announced.
The asset management firm for the €1.6trn Norwegian sovereign wealth fund launched the latest phase of its climate strategy at a press conference this morning, which lays out 41 actions it will take between now and 2030.
Wilhelm Mohn, the firm’s global head of active ownership, said it would “further strengthen the link between the climate work we do, and our investment objectives”.
“That means closer collaboration between our risk function, our ownership function and our investment functions,” he added.
In the official document outlining the new climate strategy, NBIM said it will “streamline the link between our ownership and risk-based work on climate change” as part of a commitment to undertake “risk-based divestments based on long-term financial considerations”.
It will also stress-test its equity portfolio against extreme climate-related scenarios over coming years, to help it identify vulnerabilities and ensure resilience; and it will further develop its in-house climate scenario analysis to better reflect fiscal and other relevant risks.
Speaking alongside Mohn at the press conference was Eivind Fliflet, the head of NBIM’s environmental team. He explained that NBIM is in the process of “embedding climate analytics right into the platform that our portfolio managers use every day for trading analysis”.
The move, he said, would put climate “right at the heart of the investment process”.
New focuses
On the stewardship side, Fliflet said NBIM would continue to engage with big emitting companies.
“But we’re also putting on that list companies we believe have a heightened climate or nature risk,” he explained. “In our dialogues, we’re going to be focusing more on physical climate risk, adaptation and nature.”
The fund currently has 306 portfolio firms on its engagement list for climate, but Fliflet said that number “is going to change over time” – although he would not provide further details.
NBIM has divested from 44 companies on climate and nature-related grounds since 2022. Over the same period, it has re-included eight companies in its universe after they improved their performance on the topics.
In terms of progress towards its climate goals, Mohn said: “While global emissions are still rising […] the picture for our portfolio is somewhat different,” adding that both absolute and relative emissions had decreased “slightly”.
“Some of the changes are due to the growth of technology companies, but there is actually an underlying trend here of decarbonisation by companies,” he said.
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