World’s Biggest Wealth Fund Tells Firms to Give It More ESG Data

(Bloomberg) -- Norway's $1.1 trillion wealth fund wants the companies it invests in to step up their game on sustainability reporting.

The world's biggest sovereign wealth fund has made no secret of its expectation that companies improve their approach to disclosures on issues such as environmental and climate metrics, amid a lack of global standards. On Tuesday, the investor spelled out what it wants in in a new position paper.

The fund expects sustainability disclosures at least annually and said boards should, as a starting point, consider industry-specific metrics from the Sustainability Accounting Standards Board. Broader disclosures should be based on Global Reporting Initiative standards, it added.

“In recent years, we have requested companies to go from words to numbers in their sustainability reporting,” Yngve Slyngstad, the chief executive of Norges Bank Investment Management, said in a statement. “We wish to see more relevant and comparable reporting from companies, so that we, as an investor, can analyze the companies' exposure to sustainability risks.”

Norway's fund, which owns 1.5% of the world's listed stocks, invests according to a broad set of ethical guidelines, from a ban on tobacco and some weapons to restrictions related to climate change and human rights violations. It's been perceived as increasingly activist in recent years as it asked for more reporting on climate risk and for boards to curb executive pay.

At the same time, the fund has only boosted its clout in global financial markets as its size ballooned to record levels last year. The investor reported a record $180 billion return in 2019 thanks to a rally in equities.

The fund had 3,412 meetings with companies last year, it said in a separate Responsible Investment report. That's up from 3,256 in 2018. It also said it has started a dialog with 14 banks on money laundering.

To contact the reporter on this story: Mikael Holter in Oslo at mholter2@bloomberg.net

To contact the editors responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net, Stephen Treloar

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