Norway’s Government Pension Fund Global – the world’s largest sovereign wealth fund – has adopted tougher investment standards to protect tropical forests, as part of a new policy on climate change. The fund has more than US$ 850 billion worth of assets, and accounts for one per cent of shares traded globally.
Its new policy sends a strong signal that forest destruction is not an acceptable practice for responsible business, according to Rainforest Foundation Norway.
The Norwegian pension fund had already said it was withdrawing from investments in coal and palm oil. However, Rainforest Foundation Norway calculates it still has US$ 16.5 billion of assets in business sectors that drive deforestation.
Under the new policy, companies in the investment portfolio which engage in activities that have an impact on forests are required to have a strategy for tackling deforestation resulting from their operations and supply chains. Other obligations include adhering to best practices in sustainable forest management, monitoring supply chains and strengthening requirements for disclosure of information on climate and forest related issues.
Action to preserve forests abroad comes as the Norwegian government faces criticism on its environmental record at home. Campaigners have threatened civil disobedience after controversial plans were approved to allow the dumping of mining waste into Førde fjord, a spawning ground for cod and salmon.