Investing the state’s revenues from oil and gas production and managed by a unit of Norway’s central bank, the Government Pension Fund Global is one of the world’s largest investors in equities, bonds and real estate.
It holds stakes in around 9,100 companies worldwide and has set the pace on a host of issues in the field of environmental, social and corporate governance (ESG).
“We are seeing substantial improvements in companies’ reporting on climate change across almost all industries. In 2020, almost 42% of the companies had very good reporting and 24% had good reporting,” the fund’s management arm, Norges Bank Investment Management (NBIM), said in an annual report on responsible investments.
“In general, we saw better reporting on governance and risk management processes than on strategies and metrics.”
Sector-wise, companies in telecommunications, personal and household goods, and healthcare had the best reporting overall, the fund said.
The reporting of companies in construction and building materials, insurance, oil and gas, and industrial goods and services was “generally weaker”, it said.
The fund primarily focuses on dialogue with companies to push its priorities. In 2020 fund officials held 2,877 meetings with 1,209 companies, mainly digitally due to the coronavirus pandemic, it said.
It initiated a dialogue with 16 banks on how to manage climate risk in their lending and financing portfolios, the fund said.
In the report, the fund highlighted that it had addressed bank-financed emissions with Morgan Stanley (NYSE:MS) and Australia & New Zealand Banking Group (OTC:ANZBY) Ltd, the environmental impact of the fashion industry with Adidas (OTC:ADDYY) and how to produce cement with fewer emissions at HeidelbergCement (DE:HEIG).
Aside from climate change, the fund had discussed the remuneration of CEO Sundar Pichai at Alphabet (NASDAQ:GOOGL), of AstraZeneca (NASDAQ:AZN) CEO Pascal Soriot at the pharmaceuticals firm and the composition of the board and its nomination process at oil firm Royal Dutch Shell (LON:RDSa).