A spokeswoman for NBIM confirmed reports it would join legal action underway against the German car manufacturer after it provided “incorrect” emissions data.
In September last year, US regulators ordered Volkswagen to recall more than 480,000 vehicles after it was found software had been employed to falsify its cars’ emissions data.
This triggered a scandal that saw Volkswagen’s share price drop from €162.40 to as little as €92.36 at the beginning of October.
Its share price has since recovered, closing at €127.50 last week.
In a statement provided to IPE, a NBIM spokeswoman said: “It is the [Volkswagen] board’s responsibility to ensure accurate and timely information is disclosed to the shareholders.
“Volkswagen informed the public about the incorrect emissions data after US authorities released a notice of violation letter.
“We have been advised by our lawyers that the company’s conduct gives rise to legal claims under German law. As an investor, it is our responsibility to safeguard the fund’s holding in Volkswagen.”
While Volkswagen is not among the sovereign fund’s 10 largest equity holdings, at the end of 2014, its stake was worth NOK9.7bn, equivalent to a 1.22% share of the firm’s equity.
However, by the end of 2015, it had sold off some of its stake.
It now holds 1.02% of shares – worth NOK6.6bn and granting it 0.26% of votes, down from 0.49% the year prior.
The Norwegian sovereign fund is not the first institution to pursue Volkswagen in the courts.
A Dutch foundation was set up in the wake of the revelations to sue the German manufacturer.
The California Public Employees’ Retirement System was among the signatories to a case filed in March claiming €3.3bn in damages.
The scandal has also led to institutional investors, including Sweden’s AP7, to call for the car industry to be more transparent about lobbying efforts around emissions standards.