NORWAY - The Norway Government Pension Fund - Global is planning to invest over €400m in carbon capture and storage as part of its commitment to ethical and environmental investments.
Roger Schjerva, state secretary at the Norwegian ministry of finance, confirmed at a discussion organised by campaigning group FairPension in London on Monday that the fund will invest at least NOK3.5bn (€410m) in carbon capture facilities in 2010 - a concept considered to be a growth area for Norway as it will double the country's commitment to the carbon capture field within a year.
The move is part of its Norway-Global's investment programme in sustainable resources, and was identified within its recent research projects examining the "effects of climate change on financial markets". The government had previously confirmed it would invest NOK20bn in environmental investment opportunities.
"The next stage of the process of establishing a new investment programme for the fund will be a focus on environmental investment opportunities, such as climate-friendly energy, improving energy efficiency, carbon capture and storage, water technology and the management of waste," said Schjerva.
Schjerva admitted environmental and social governance strategies had first been adopted for political reasons.
The state secretary ruled out any investment in tobacco and weapons "regardless of the effects" on returns, and said he was positive that the pension fund's capital value would double in the next five years, despite production of crude oil - which finances the sovereign pension fund - having peaked.
Asked about alternative investment routes, he gave a surprisingly honest answer, and admitted: "Should we be involved in investing in hedge funds? I don't know."
He also praised the government pension fund's policy of active ownership as "how we can best influence business" and promised officials would continue to expand the concept and activity.
That said, Schjerva also admitted it was difficult to find the balance between securing healthy returns and acting as an ethical investor, as more money-conscious individuals and pressure groups have accused pension fund officials of not being proactive enough in their area of interest.
"NGOs criticise us for not acting on their special issue and criticism from both ends makes us believe that we probably are on the right track," added Schjerva.