Norway‘s $1.35 trillion wealth fund will step up its engagement with companies over their management of climate risk by voting against board members it deems are not doing enough on the issue, it said on Thursday.
Investing the state’s revenues from oil and gas production and managed by a unit of Norway‘s central bank, the fund is one of the world’s largest investors, putting money into 9,200 companies in 70 countries, among other assets.
“We will now vote against board members if a company has experienced material failures in the oversight, management or disclosure of climate risk,” the fund said in its annual report on responsible investments.
The fund has long engaged on climate change with the companies it invests in. Last year, it voted against the re-election of 61 directors at 18 companies due to failures in adequately managing climate risk.
That number will increase this year, the fund‘s chief governance and compliance officer Carine Smith Ihenacho said.
“We expect it to be more companies we will vote against this year,” she told Reuters, adding it would focus again on the biggest emitters such as those in the heavy industries, cement, steel, electricity and oil and gas sectors.
In September, the fund laid out plans to firms to cut their greenhouse gas emissions to zero by 2050, in line with the Paris Agreement and following a mandate from Norway‘s government.
In 2022, the fund discussed climate change at 810 meetings it held with companies that represent 33% of the value of the its equity portfolio.
One of them was oil major Shell, with whom the fund discussed the company’s energy transition plan and climate change, it said.
In a sign of its focus on climate, the fund no longer prints the report, making it available online only.
Reuters