Norwegian SWF updates 2022 investment strategy and invests in unlisted renewable energy infrastructure.
Norges Bank Investment Management (NBIM) will vote in this AGM season against boards with fewer than two women, as part of its updated 2020-2022 strategy.
This will affect large- and mid-cap companies in developed markets, a spokesperson for the NOK11,1 trillion (€1,1 trillion) sovereign wealth fund told ESG Investor.
NBIM’s updated policy also includes a tougher stance on firms emitting high levels of greenhouse gases.
“We will analyse the largest emitters in our portfolio and may vote against directors if the company has limited disclosure about its strategy for managing the transition to a low carbon economy,” the spokesperson added.
The updated strategy also says that NBIM will scale up its dialogue and hold boards to account for the outcomes of their decisions, including financial results and the impact of company operations on society and the environment.
“We will use new data and predictive analysis to fine-tune our voting decisions according to our own principles. We will also further automate the voting process, so we can focus our limited human resources on the companies and voting decisions that matter most to the fund,” the spokesperson explained.
The strategy builds on NBIM’s previous plan of high performance, responsible investment and transparency.
“The revised strategy focuses on optimising processes, on technology and on developing our employees,” explained Nicolai Tangen, Chief Executive Officer at NBIM.
At the same time, the fund announced to acquire a 50% interest in an unlisted offshore wind farm.
“Unlisted renewable energy infrastructure is a new asset class for the fund, which we invest in to improve the overall diversification of the fund,” Tangen commented.
The investment is the largest operational offshore wind farm in the Netherlands with an installed capacity of 752 MW, NBIM said.
Orsted will receive €1,3 million but remain co-owner and operator of the project Borssele 1 & 2.
The agreement was signed on 7 April 2021, with completion expected in the second or third quarter of 2021.
Mie Caroline Holstad, Chief Real Assets Officer at NBIM, said that “the acquisition is in line with our strategy to build a high-quality portfolio of wind and solar power generation assets”.
“The unlisted renewable energy infrastructure strategy supplements our existing unlisted real estate portfolio well, and we draw on our long experience with direct investments,” she added.
The strategy document also says that NBIM will reduce its allocation to systematic factors and exposure to segments outside the benchmark index.
“The exceptions are our allocations to real estate, unlisted renewable infrastructure and emerging market debt,” it noted.