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NBIM Raises Bar on Climate Expectations for Corporates

Norges Bank Investment Management (NBIM) has published its updated expectations on climate, which will apply to all investee companies and directly inform its voting decisions. These six core expectations span ensuring board oversight of risks and opportunities, providing climate risk disclosures, committing to greenhouse gas (GHG) reporting, setting a net zero by 2050 or sooner target, implementing interim decarbonisation targets, and developing a transition plan. “With the effects of climate change becoming more evident, we really saw the need to sharpen our expectations,” said Carine Smith Ihenacho, NBIM’s Chief Governance and Compliance Officer. “We look forward to having even more valuable engagements with companies and their boards on this important topic. We think the core expectations will be particularly useful in our board level dialogues.” NBIM, which manages Norway’s US$1.2 trillion sovereign wealth fund, has additionally published its view on corporate use of voluntary carbon credits, noting that companies should prioritise reducing their own emissions, but can use additional and verified credits “as a supplement”. These credits should not be countered towards science-based interim decarbonisation targets, NBIM said, calling for companies to be transparent about the details of the credits they use.

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