Post by account_disabled on Feb 18, 2024 2:19:47 GMT -5
Norwegian Sovereign Fund Government Pension Fund Global – one of the world's largest individual investors – warned CEOs that they must address the climate crisis, human rights abuses and diversity in the boardroom or it will vote against their reelection to the board, according to The Guardian .
The recent statement not only shows that Middle East Mobile Number List investors are taking social responsibility to the next level, but it raises the question of whether other institutional investors should be playing a more active role in the fight to mitigate climate change and other social issues.
Investors point out lack of CSR by CEOs
The Norwegian Sovereign Fund is a diversified savings and investment vehicle created to guarantee the future pensions and wealth of Norwegians from the income derived from the exploitation of their natural resources. However, in the coming months, the Fund could vote against the re-election of at least 80 CEOs for failing to set or meet ambitious goals in accordance with environmental, social and governance ( ESG ) criteria.
With a current holding of more than 13 trillion Norwegian crowns (1.3 trillion US dollars), the Norwegian Sovereign Fund controls an average of 1.3% of 9,338 companies in 70 countries and has large stakes in Apple, Nestlé, Microsoft and Samsung. He has signaled that he expects all major carbon emitters to set emissions targets now, and all other companies to do so no later than 2040.
To enforce this expectation, the Fund has begun voting against the boards of companies that do not have objectives and do not report on climate risk. In 2022, the fund voted against the entire board of 18 companies, and now plans a “big step forward in the way it votes against board members” this spring.
The warning that CEOs must address the climate crisis is serious, so much so that the Fund has already sold stakes in several companies that, fundamentally, it thought had “an unsustainable business model when it comes to climate” or defense from the human rights.
Responsibility in the face of climate change
According to Carine Smith Ihenacho, head of governance and compliance at Norges Bank Investment Management – the bank that currently manages the Fund – the climate crisis is real and everyone has a role to play in this difficult situation, including the companies.
“We have therefore increased our expectations towards companies when it comes to setting targets to reach net zero [emissions] by the 2050 target.
And we will put more pressure on companies to set goals and understand how they are going to get there."
Carine Smith Ihenacho, Head of Governance and Compliance at Norges Bank Investment Management .
Continuing with Carine Smith Ihenacho, the Fund “wants to support and drive […] companies through the transition to a low-carbon economy.” She stated that only 17% of the more than 9,000 companies the Fund invests in have established “clear, science-based net zero goals.” Therefore, the fund is now taking steps to move the remaining 83% of companies to set targets quickly.
But in addition to climate, the Fund has signaled that it is “taking a more active approach to addressing […] human rights, excessive executive pay, tax transparency and boardroom diversity.”
The official also added that the Fund – which this week recorded a loss of 1.64 trillion crowns for 2022 – will ask companies to publish scenarios that include [what happens if temperatures rise] 1.5 ° C “so that we can understand how they are working to achieve their objectives.
The recent statement not only shows that Middle East Mobile Number List investors are taking social responsibility to the next level, but it raises the question of whether other institutional investors should be playing a more active role in the fight to mitigate climate change and other social issues.
Investors point out lack of CSR by CEOs
The Norwegian Sovereign Fund is a diversified savings and investment vehicle created to guarantee the future pensions and wealth of Norwegians from the income derived from the exploitation of their natural resources. However, in the coming months, the Fund could vote against the re-election of at least 80 CEOs for failing to set or meet ambitious goals in accordance with environmental, social and governance ( ESG ) criteria.
With a current holding of more than 13 trillion Norwegian crowns (1.3 trillion US dollars), the Norwegian Sovereign Fund controls an average of 1.3% of 9,338 companies in 70 countries and has large stakes in Apple, Nestlé, Microsoft and Samsung. He has signaled that he expects all major carbon emitters to set emissions targets now, and all other companies to do so no later than 2040.
To enforce this expectation, the Fund has begun voting against the boards of companies that do not have objectives and do not report on climate risk. In 2022, the fund voted against the entire board of 18 companies, and now plans a “big step forward in the way it votes against board members” this spring.
The warning that CEOs must address the climate crisis is serious, so much so that the Fund has already sold stakes in several companies that, fundamentally, it thought had “an unsustainable business model when it comes to climate” or defense from the human rights.
Responsibility in the face of climate change
According to Carine Smith Ihenacho, head of governance and compliance at Norges Bank Investment Management – the bank that currently manages the Fund – the climate crisis is real and everyone has a role to play in this difficult situation, including the companies.
“We have therefore increased our expectations towards companies when it comes to setting targets to reach net zero [emissions] by the 2050 target.
And we will put more pressure on companies to set goals and understand how they are going to get there."
Carine Smith Ihenacho, Head of Governance and Compliance at Norges Bank Investment Management .
Continuing with Carine Smith Ihenacho, the Fund “wants to support and drive […] companies through the transition to a low-carbon economy.” She stated that only 17% of the more than 9,000 companies the Fund invests in have established “clear, science-based net zero goals.” Therefore, the fund is now taking steps to move the remaining 83% of companies to set targets quickly.
But in addition to climate, the Fund has signaled that it is “taking a more active approach to addressing […] human rights, excessive executive pay, tax transparency and boardroom diversity.”
The official also added that the Fund – which this week recorded a loss of 1.64 trillion crowns for 2022 – will ask companies to publish scenarios that include [what happens if temperatures rise] 1.5 ° C “so that we can understand how they are working to achieve their objectives.