Norway to turn oil fund greener

2014-04-04 19:19

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

The rightwing government proposed almost doubling the green investments made by its sovereign wealth fund, the largest in the world, to up to €6.0bn.

Fed by the country's petroleum surplus, the so-called "oil fund" is worth €624bn, invested in stocks and bonds and, to a lesser extent, in real estate.

Norway's central bank, in charge of its management, currently has a mandate to invest between €2.6bn and €4bn in green stocks.

According to Friday's announcement by Finance Minister Siv Jensen, that amount could be almost doubled to reach between €4bn and €6.7bn.

But the proposal fell short of expectations for environmentalists, who were hoping the fund's mandate would be broadened to allow it to also invest in climate-friendly infrastructure such as wind power and solar energy.

Environmental group WWF was calling for five percent of the fund's total value, or €34bn as it stands today, to be earmarked for that purpose.

In an annual white paper on the management of the fund, the government also proposed giving the Norwegian central bank more power in ethical matters, allowing it to decide what companies to divest from on that ground.

Today, the finance ministry makes such decisions, with recommendations by 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.

The proposal could face difficulties in parliament, where the government parties are in a minority.

Read more on:    norway  |  environment

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