Norway: Norway’s $1.3tn oil fund broadens ESG screening to smaller companies

Norway’s $1.3tn oil fund will screen the hundreds of new companies it adds to its portfolio each year for environmental, social and governance risks as the world’s largest sovereign wealth fund seeks to regain its place as one of the leading responsible investors across the globe.

Nicolai Tangen, chief executive of the fund, told Norway’s parliament on Monday that it had only screened the biggest new companies for such risks before adding them to its portfolio while the smallest companies were added automatically.

Now the fund will screen all the 500 to 600 companies that are typically added to its reference index each year and decide whether to invest in them or not or start active ownership measures such as monitoring.

“It’s a very natural extension of what we’ve been doing. You just don’t want to have rotten apples. You want to keep the worst companies out,” Tangen told the Financial Times after the parliamentary hearing.

Norway’s oil fund was one of the pioneers of ethical investing this century and has attracted heavy attention for its exclusions of entire industries such as tobacco, nuclear weapons and more recently coal, as well as divestments of individual companies such as Walmart for breaching labour rights and Rio Tinto for environmental damage.

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