Norway’s $1.1 trillion wealth fund, the world’s biggest, welcomed a shift among European oil and gas firms towards greener policies yesterday.
Top energy firms including BP, Repsol, Royal Dutch Shell, Total and Norway’s Equinor have in pledged to cut carbon dioxide emissions in the recent months and provide more information about their role in global warming.
Many environmentalists argue the targets do not go far enough but the supportive comments from the Norwegian fund – which owns 1.5% of all globally listed equities – could help to persuade other investors that sufficient progress is being made.
“European oil companies have moved a long way, the clever detail and the comprehensiveness of reporting is quite different and much improved from what we saw a decade ago,” the fund’s chief executive, Yngve Slyngstad, said in an interview with Reuters.
The fund, built up itself from the proceeds of Norway’s extensive oil and gas resources, reported a 19.9% return on investment last year and record earnings of 1.69 trillion Norwegian crowns ($180 billion), helped by surging stock markets.
The fund, now worth three times Norway’s annual gross domestic product, owns a 2.55% stake in Shell, worth $5.9 billion at the end of 2019, according to fund data published Thursday, as well as 2.34% in BP, worth $3 billion, and 2.3% in Total, worth $3.4 billion.
Mr Slyngstad continued: “Shell, BP and Total … are going quite rapidly into, it seems to me, a strategy that is more adapted to a scenario of climate change.
“It is something that in general we welcome as an investor, that the companies are aware of these issues and … are publicising to us the relevant numbers to see how they move.
“But we do not get involved in their strategy.”
In 2019, the Government Pension Fund Global returned 19.9 percent, equivalent to 1,692 billion kroner.
This is the highest return measured in kroner in a single year in the fund’s history, as well as the second best return measured as a percentage.