Norway wants to turn its huge oil fund greener

OSLO, Norway – Oil-rich Norway moved Friday, April 4, to target its huge sovereign wealth fund’s investments more closely at boosting ecological and green businesses, but environmentalists said the proposals were not strong enough.

The rightwing government proposed almost doubling the green investments made by its sovereign wealth fund, the largest in the world, to up to 50 billion kroner (6.0 billion euros, $8.3 billion).

Fed by the country’s petroleum surplus, the so-called “oil fund” is worth 5.1 billion kroner (624 billion euros, $856 billion), invested in stocks and bonds and, to a lesser extent, in real estate.

Norway’s central bank, in charge of its management, currently has a mandate to invest between 20 billion and 30 billion kroner in green stocks.

According to Friday’s announcement by Finance Minister Siv Jensen, that amount could be almost doubled to reach between 30 billion and 50 billion kroner.

But the proposal fell short of expectations for environmentalists, who were hoping the fund’s mandate would be broadened to allow it to also invest in climate-friendly infrastructure such as wind power and solar energy.

Environmental group WWF was calling for 5% of the fund’s total value, or 255 billion kroner as it stands today, to be earmarked for that purpose.

In an annual white paper on the management of the fund, the government also proposed giving the Norwegian central bank more power in ethical matters, allowing it to decide what companies to divest from on that ground.

Today, the finance ministry makes such decisions, with recommendations by an independent council on ethics, while the central bank is left to execute orders.

Transferring these responsibilities to the central bank – still within an ethical framework defined by the government – would allow the fund to “speak with one voice” abroad and avoid the perception that decisions to exclude certain companies are a consequence of Norway’s foreign policy, Jensen said.

The proposal could face difficulties in parliament, where the government parties are in a minority. – Rappler.com