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Norwegian oil fund to sell shares in companies with poor ESG record

The head of Norway’s biggest sovereign wealth fund, Nicolae Tangen, says the fund should boost its revenues by selling more of the shares it holds in companies with an unsatisfactory record in terms of the so-called ESG criteria – Environmental, Social and Corporate governance.

Tangen, CEO of the Norges Bank Investment Management (NBIM) who oversees the Norwegian “Oil Fund”, told the Financial Times that the Fund should “engage in risk in a more reasonable fashion” and play a more active role in shedding investments showing poor ESG results.

The Fund, formally known as Government Pension Fund Global, holds 1.5 % of all world shares. In 2019, it sold shares in 42 companies after assessing risk linked to ESG criteria. Among there were 16 electricity producers and 12 mining companies.

Tangen said he wanted to boost those numbers and planned to take on staff to deal with matters concerning ESG criteria.

Companies and financial institutions have become more actively focused on these issues in response to growing pressure from activists and investors.

U.S. banks JPMorgan Chase & Co. (SPB:JPM) Citigroup Inc. (SPB:C) and Bank of America Corp. (SPB:BAC) have issued “green” and social bonds over the course of the year.

French food and water producing company Danone SA took on a more active role in ESG issues last June and became an “entreprise à mission” under French law – defined as a company whose social and environmental objectives are aligned with its purpose and set out in its Articles of Association.

Danone set up an independent commission to oversee the realisation of these goals and report on progress.

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