Company CEO Nikolai Tangin says climate change is a growing financial risk and should not be a political issue.
The chief executive of the world’s largest sovereign wealth fund has expressed concern that political resistance to climate and environmental measures is spreading from the US to the UK.
Nicolai Tangen, CEO, Inc The Norwegian Petroleum Fund (NFP) announced $ 1.4 trillion, l financial times: “The UK Government’s response to environmental, social and governance (ESG) measures is slowing progress in combating climate change at a time when it is more important than ever.”
Last month, Labor failed to win a by-election in Uxbridge, a constituency on the outskirts of London, despite leading the Conservatives well in several national opinion polls. Both sides see this as evidence that citizens are not happy with green policies: this year, the Mayor of London, Sadiq Khan, extended vehicle emissions charges to the London suburbs to improve air quality.
FPN is one of the most influential investors in the world, with an average stake of more than 2.5% in all listed European companies. It is funded by the country’s oil and natural gas revenues.
Under Tangen’s leadership, pressure has increased on companies in which he owns shares to take action against climate change. Among other things, he presented his first proposals to shareholders at an annual meeting in a decade and spoke out against the backlash against ESG measures that began in the United States.
Climate change is a growing financial risk and should not be a political issue, Tangen says, in part because rising temperatures are affecting crop yields and driving up prices for all kinds of food, from orange juice to rice: “This summer of global warming has passed.” To the global boil. Recently, there is a much closer relationship between weather and inflation. That is why it is a complete financial risk. We have to step up work on the weather.”
Tangen also outlined the fund’s view on artificial intelligence (AI). It has asked the 9,000 companies in its portfolio to be transparent about how they design and use AI and prudently manage risk.
The fund has doubled the number of AI meetings with its portfolio companies: 166 this year through May, up from 177 in all of 2022.
Tangen says the fund will vote against companies that don’t have enough AI expertise at the board level. But at the same time he believes that “artificial intelligence offers a lot of opportunities. Internally, it has already made our business operations more efficient and the goal is to increase productivity by 10%.” But he adds that “global regulation of AI will be very difficult, because the technology is essential to the fight between the US and China over weapons, health and financial issues and in the field of autonomous driving.”
Funding some major investments in the first half of this year: only seven companies — Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla — made a third of their earnings. These companies now account for 12% of its portfolio.
According to Karen Smith Inacho, the fund’s director of corporate governance and compliance, the fund is particularly vigilant that the technology, healthcare, consumer goods and retail finance sectors make responsible use of AI.
The fund returned 10% in the first half of 2023 thanks to the recovery in stock markets. This contrasts with one of the worst returns in its history in 2022.
© The Financial Times Limited [2023]. All rights reserved. FT and Financial Times are registered trademarks of Financial Times Limited. Redistribution, copying or modification is prohibited. EXPANSIÓN is solely responsible for this translation and Financial Times Limited is not responsible for its accuracy.
“Subtly charming bacon junkie. Infuriatingly humble beer trailblazer. Introvert. Evil reader. Hipster-friendly creator.”