Published on 10 September 2018

SUSTAINABLE FINANCE

The largest sovereign fund in the world pledges to save the ocean from plastic pollution

Plastic pollution in the ocean is increasingly troubling...so much so that the Norwegian Sovereign Wealth Fund, the largest sovereign fund in the world, has just pledged to protect it. This is a noteworthy act, as the fund is present in more than 9000 companies worldwide.

The Norwegian sovereign wealth fund is urging companies to tackle plastic pollution in the ocean.
@Flickr / Ian Burt

Following human rights abuses, coal and tobacco, plastic is now public enemy number one. Over the summer, the world has seen that the ocean is no longer able to support human waste. The proof can be seen in plastic bags found in the ocean abyss or the thousands of tons of garbage washed up on some of the most beautiful beaches in the world.

Conscious of the risks, the Norwegian sovereign wealth fund, with more than €1 trillion in assets, published a document on 5 September, urging companies to become more involved in protecting oceans, more specifically, protecting against the pollution caused by plastic waste.

"The ocean is a vital part of the biosphere and an important part of the global economy," said Yngve Slyngstad, CEO of Norges Bank Investment Management. "We expect companies to manage the challenges and opportunities related to sustainable use of the ocean,” he added.

Loss of long-term value

The fund is owned by roughly 9,000 companies in more than 70 countries, and it is urging each and every one to integrate this theme into their strategy. “Many companies in our portfolio depend on the ocean as part of their business model. These companies are likely to be affected by degradation of the ocean. The ocean could reduce companies' ability to generate value for investors in the long term,” explained the sovereign fund, who would also be penalized.

The Norwegian sovereign wealth fund is calling on plastic producers to consider a transition to the "circular economy". It also challenges fishermen to adopt sustainable practices by ensuring that future fish populations are not endangered. But these expectations also target sectors that may have an indirect effect on the oceans, such as distribution, plastics and agriculture.

Prior to COP21 in 2015, the fund had excluded 22 companies from its portfolio that were active in the coal, oil sands and cement industries. At the end of the year, the Norwegian government will have to decide whether its sovereign fund, whose wealth has been built on hydrocarbons, will cease to invest in oil companies. This recommendation from the country's central bank was a shock for a country leading in black gold production in Europe. This summer, however, a government commission opposed this strategy.

Concepcion Alvarez @conce1


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