Norway’s trillion-dollar sovereign wealth fund is demanding companies it invests in to implement ocean risks into their policies to “manage the challenges and opportunities related to sustainable uses of the ocean.”
Norges Bank Investment Management, which runs the NOK8.6 trillion ($1.02 trillion) Government Pension Fund Global, will begin to speak with boards of companies whose ventures directly and indirectly lead to ocean degradation to get them to integrate ocean risk into their risk management process.
Norges Bank’s examples of ocean-based sectors include shipping, offshore oil and gas, offshore wind, wild-catch fisheries, aquaculture, and marine tourism. Land-based industries include waste management, mining, agriculture, chemicals, and consumer goods.
Norges Bank will base its ocean policies on international standards such as the UN Global Compact, the UN Guiding Principles on Business and Human Rights, the G20/OECD Principles of Corporate Governance, and the OECD Guidelines for Multinational Enterprises. Should the bank not see a long-term sustainable model in these companies, it could divest completely.
Norges Bank invests $25.01 billion in just plastic production investments, which is about half of its $56.5 billion vested with the affected companies. The total ocean-related investments account for roughly 8% of its global equities portfolio.
Companies in its portfolio under this category will have to consider their impact on the ocean and assess their activities in an eco-friendly manner, such as plastics incorporating a circular economy-based strategy, according to Norges Bank’s ocean sustainability expectations document, which was released in accordance with the statement.
The business’ ocean-related activities are also expected to monitor the risks of these tasks and work towards mitigating them, incorporating them into their risk framework. They also must disclose to stakeholders how they are incorporating ocean sustainability into their practices, as well as results.
In addition, Norges Bank wants companies to share updates on their policy regulations, review memberships of trade associations, be transparent in their responsibility, and support the development of regular standards to promote ocean sustainability.
“The ocean is a vital part of the biosphere and an important part of the global economy. We expect companies to manage the challenges and opportunities related to sustainable use of the ocean,” said Yngve Slyngstad, CEO of Norges Bank Investment Management, in a statement.