Norwegian climate minister Elvestuen welcomes new green financial roadmap

Industry group Finance Norway makes seven general recommendations.

Norway’s Climate and Environmental Minister Ola Elvestuen has welcomed a move by the country’s financial sector to create a roadmap for green competitiveness as the government seeks to assess climate-related risks factors and their significance for the economy.

Last month, industry group Finance Norway launched ‘The Roadmap for Green Competitiveness in the Norwegian Financial Sector’ (link) setting out a vision for a sustainable Norwegian financial sector in 2030.

It makes seven general recommendations. These include developing a taxonomy for sustainable finance, aligning climate reporting with the Taskforce on Climate-Related Financial Disclosures (TCFD) and including climate risk in the Norwegian financial supervisory authority’s mandate.

Other recommendations include improved collaboration, using digitisation to scale up the market for climate-smart solutions and increasing climate competence and capacity in the financial sector.

The roadmap, which says the financial sector’s input is essential for Norway to succeed in the transition to a low-carbon economy, also makes recommendations for the country’s financial sector.

This includes for the banking sector measuring carbon-related credit exposure, making climate part of the credit process, including climate criteria in mortgages and making the bond market “greener”.

Asset managers are urged to measure greenhouse gas emissions of portfolios, integrate climate risk in mandates, strategies and investment decisions and stress test portfolios against zero emissions in 2050.

The roadmap was handed over to Elvestuen and State Secretary at the Ministry of Finance Geir Olsen at Finance Norway’s most recent sustainability conference.

Speaking to RI, Elvestuen said: “The roadmap is an important step and shows the sector is taking its important role seriously. We need long-term, profitable and sustainable investments to achieve our climate targets. The financial sector will be key in this effort, and will need tools to identify risks and opportunities.”He continued that the roadmap would be key to follow up on the Norwegian government’s strategy for green competitiveness.

Last October, the government appointed an expert commission to assess climate-related risk factors and their significance for the Norwegian economy. The commission has been asked to deliver its recommendation to the Ministry of Finance by 14 December 2018. Members of the commission include PRI chair Martin Skancke.

“The financial sector’s roadmap is of interest and relevance to the work on the expert commission,” said Elvestuen.

Elsewhere, Elvestuen said a new €2bn ‘’Green Fund’ in Norway could invest up to NOK400m (€42m) this year and was now under the remit of the Ministry of Trade, Industry and Fisheries.

The fund, located in oil capital Stavanger, will co-invest in green projects nationally and internationally. Elvestuen’s Liberal Party pushed the fund through Parliament to speed up a change in Norway away from oil and gas dependency.

Elvestuen also said the new name for the fund would be Nysnø Klimainvesteringer which in English is broadly translated to Fresh Snow Climate Investments.

Elvestuen added that the Norwegian government was assessing a request from the country’s massive sovereign wealth fund Government Pension Fund Global on its fossil fuel investments. Norges Bank, the asset manager for GPFG, wants to kick oil and gas out of its benchmark index. If allowed, it would make it easier for GPFG to divest fossil fuels and could trigger a spate of similar moves. Boycott decisions by the fund are often used as a guide for exclusions companies by other institutional investors.

Elvestuen says said an expert group appointed to assess the request will be responding before next month. “The government needs a broad basis and will thoroughly examine the report before making any further assessments and decisions,” said Elvestuen.