The backlash against ESG investing in the U.S. could reach Europe, said Nicolai Tangen, CEO Norges Bank Investment Management, the in-house manager of Government Pension Fund Global, Oslo, the 15.77 trillion Norwegian kroner ($1.53 trillion) sovereign wealth fund.
"We are seeing it coming to Europe," Tangen said during a Feb. 7 press conference on NBIM's 2023 responsible investment report.
"We are seeing it a bit more in the U.K., we are seeing it in two places in Europe," Tangen said.
It "is showing up in different types of pressure placed on the integrated energy companies. It's going the opposite way of what it did in last few years, so it's really worrying," he said.
Another concern is large shareholders around the world "being less supportive of shareholder resolutions and voting differently than they have been in the past," he said. NBIM supported 34% of shareholder sustainability resolutions last year.
Asked if NBIM was feeling any pressure to rethink ESG principles, Tangen said, "No. Our views are well anchored in the Norwegian Parliament" and fund documents. "We do it because we want to make money," he added.
In 2023, NBIM stepped up efforts on climate, including pushing more companies to set net-zero targets and have detailed transition plans to achieve them. NBIM also increased the scale of risk-based divestments to 86 in 2023.
Other priorities were artificial intelligence and increased transparency from companies it invested in, and those will continue to be stressed in 2024. "We are super excited about AI," Tangen said at the press conference, but he also cautioned about the risks, and the need for board accountability.
NBIM will focus more on "good boards" this year, Carine Smith Ihenacho, chief governance and compliance officer, said at the briefing, with an emphasis on board quality and efficiency.