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Norway wants to turn its huge oil fund greener

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

In its yearly policy paper on the fund — the world's largest — the rightwing government also proposed giving the central bank, which manages the fund day-to-day, more power to decide when to disinvest from a company for ethical reasons.

Fed by the country's oil surplus, the fund is currently worth 5.1 billion kroner (624 million euros, US$856 million), invested abroad in stocks and bonds and, to a lesser extent, real estate.

The central bank 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 environmentalists' expectations.

The head of the World Wide Fund for Nature in Norway, Nina Jensen — who happens to be the finance minister's sister — labeled the announcement a “huge unkept promise” by the two parties in power, the conservatives and the populist right.

WWF had called for the fund's mandate to be broadened to allow it to also invest in climate-friendly infrastructure such as wind power and solar energy, and for 5 percent of its value — 255 million kroner — to be earmarked for that purpose.

“Norway announced today that it will increase investment in environmental projects, but fell short of setting an increased dollar amount specifically targeting the renewable energy sector,” WWF said.

The head of environmental group The Future in our Hands, Arild Hermstad, said 31.4 billion kroner was already invested in environmentally friendly stocks and that the increase would therefore be minor.

Leaving Fossil Fuels?

The white paper also proposed giving the central bank more power in ethical matters, allowing it to decide what companies to divest from.

Currently, the finance ministry makes such decisions with recommendations from 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.

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