Norway Pledges to Divest From Ocean-Polluting Companies With $1 Trillion Fund
The country has already divested from companies that destroy forests.
At more than $1 trillion, Norway has the largest sovereign wealth fund in the world, holding investments in more than 9,000 companies around the world.
Going forward, it will no longer invest in companies that harm the oceans, according to a press release.
The fund’s new standards align with the United Nations Sustainable Development Goals, which call on countries to pursue 17 goals ranging from ensuring universal health care to reducing inequalities.
“If we believe there isn’t a long term sustainable model for various reasons, we will divest from them, like we have done with palm oil and deforestation,” Carine Smith Ihenacho, the fund’s Chief Corporate Governance Officer, told Reuters.
Although the fund has announced diverse standards, it will primarily focus on the health of the oceans and will look at how companies support or hinder that goal.
For example, the fund invests more than $25 billion in plastic-producing companies, and it will begin to demand that these companies curb the amount of plastic that enters the world’s oceans.
Each year, up to 13 million metric tons of plastic enter the world’s oceans, more than a garbage truck full of plastic per minute, causing immense harm to marine life.
“The ocean is a vital part of the biosphere and an important part of the global economy,” said Yngve Slyngstad, CEO of Norges Bank Investment Management, in a statement. “We expect companies to manage the challenges and opportunities related to sustainable use of the ocean.”
The fund is also calling on countries to promote sustainable fishing. Over the past several decades, overfishing has caused fish populations to plummet, threatening their long-term viability.
Companies will also be requested to stop energy extraction in marine environments to prevent oil spills and other contaminants from polluting ecosystems.
The fund holds $56.5 billion, or 8% of its investments, in ocean-related companies. Over the next several years, it will conduct reviews of relevant companies and determine if divestment is warranted.
Some critics are calling for more details.
“We would have liked to see from the expectation paper more specifics on issues like aquaculture, seabed mining and plastic use reduction,” said Martin Norman, head of Greenpeace Nordic’s sustainable finance campaign, in a statement.
“But it is clearly a step in the right direction and we look forward to see results of their engagement with companies on ocean sustainability,” he added.
Norway also funds its sovereign wealth fund through fossil fuel and natural gas extraction, two industries that are major catalysts of declining of ocean health.
As climate change from fossil fuel emissions accelerates, the world’s oceans are acidifying and turning warmer, causing coral reefs to disintegrate, fish species to be pushed from their natural habitats, and much more.
Notably, the fund is framing its new standards in financial terms, reflecting a broader trend within the global financial community.
“The ocean is a vital part of the biosphere and an important part of the global economy,” the wealth fund said in a statement. “The degradation of the ocean could reduce companies’ ability to generate value for investors in the long term. We expect companies to manage the challenges and opportunities related to sustainable uses of the ocean.”
Globally, investment funds worth trillions of dollars have already vowed to divest from companies that exacerbate climate change.
Meanwhile, hundreds of leading companies in the US have committed to investing in clean energy and have vowed to pursue the Paris climate agreement, even as the US government withdraws.
Norway has already shown how effective divestment campaigns can be. Its wealth fund has pulled funds from companies that engage in deforestation and destructive palm oil extraction, which has helped spur reform in various industries.