The chief executive of the world’s largest stock owner says life is about to get a lot harder for companies that fail environmental, social and governance tests set by institutional investors.
Nicolai Tangen, who runs Norges Bank Investment Management from Oslo, says the degree to which ESG dictates a company’s prospects is “starting to hit now.” Firms that don’t adapt face a world in which financing will dry up, insurance companies will walk away, employees will defect, social-media shaming will intensify and customers will disappear, he said in an interview.
As CEO of Norway’s wealth fund, Tangen oversees about $1tn worth of stocks, which represents roughly 72% of the total portfolio. The rest is in bonds, real estate and renewable energy infrastructure. The 55-year-old former hedge-fund boss has been looking after Norwegians’ collective savings since late 2020. And he’s promised Norway’s government he’ll turn the fund, which was built from the country’s fossil-fuel riches, into a global leader in responsible investing.
This article was originally posted on bloomberg.com