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Norwegian oil fund to double allocation to environmental mandates

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Norway’s Government Pension Fund Global (GPFG) will almost double the amount it invests in the environment, to between NOK30bn (€3.6bn) and NOK50bn from the NOK20bn-30bn it has allocated to such assets today, according to government plans.

The announcement made by the country’s Finance Ministry in its white paper to Parliament on the how the NOK5.1trn sovereign wealth fund was managed last year following on from intentions stated in the government’s coalition declaration (Sundvolden-Erklæringen) last autumn.

The Finance Ministry said: “The set allocation to environmental mandates will increase from the current 20 to 30 billion kroner to 30 to 50 billion kroner.”

In addition to this, Norges Bank, which runs the pension fund, will report separately on the fund’s investments in emerging markets and renewable energy, the ministry said. 

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It said the fund had more than NOK500bn invested in emerging markets at the end of 2013, and about NOK180bn in companies classified as environmentally friendly.

The pension fund returned 15.9% last year before management costs of 0.07%, the ministry said, down from 13.4% in 2013.

The much smaller domestic Government Pension Fund Norway (GPFN) returned 15.7% before 0.07% management costs in 2013, down from 12.2% the year before.

The ministry said the results of both funds reflected strong equity market performance during 2013.

The total value of the Government Pension Fund was NOK1.24bn over the year to stand at NOK5.21bn at the end of December, according to the ministry.

The realised annual rate of return of the GFPG since inception was 3.9%, it said, close to the estimated return of 4%, considering normal short-term fluctuations in average returns, the ministry said.

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