The NOK3.5trn (€463bn) Norwegian Government Pension Fund saw its environmental investments fall to NOK21.1bn at the end of last year from NOK25.7bn, hit by slumping share prices of solar and wind power producers.
Its 10 environmental mandates returned -22.8%, measured in international currency. Eight of the mandates were managed externally and two were internally run, Norges Bank Investment Management, which runs the fund, says in its new annual report.
Its largest environmental investment is New York-listed industrial group Johnson Controls, which is involved in energy efficiency and car batteries.
The fund has three water management mandates and its five largest holdings in this area are Pentair, Progressive Waste Solutions, Suez Environnement, Republic Services and Danaher.
The fund says it now has NOK8.5bn under external management in renewable energy and water management.
The report also gives an update on the fund’s engagements with companies.
It said Monsanto, Bayer, DuPont and Syngenta, with whom it has been in dialogue since 2007, showed progress in reducing child labour at seed farms in India.
And in December last year, NBIM and its Dutch peer APG ended three years of dialogue with five cocoa and chocolate companies after the industry committed to combating child labour. In the US, NBIM and TIAA–CREF engaged with aviation and real estate companies on carbon emissions.NBIM also began a project last year with the Netherlands’ PGGM aimed at improving companies’ reporting on water-related risks in China and India, the report says.
On the company litigation front, Norges filed claims in new class actions involving 43 listed companies in 2011 and received around $16m from previous claims.
In the final three months of the year it and 14 other institutions withdrew their financial crisis-related legal action against Countrywide Financial Corporation after a settlement was reached. Three other cases, against Vivendi, Merck and Citigroup, are still being processed in court.
“Companies also increasingly contact NBIM for views”
Due to the growth of the fund, it now has stakes of more than 2% in 872 global companies – up from 342 in 2009. “Companies also increasingly contact NBIM for views on issues,” it says. The fund’s single biggest equity investment is oil major Royal Dutch Shell, where it owns a 2.2% stake worth NOK31bn.
During the year, NBIM voted at 11,300 annual and extraordinary general shareholder meetings. The fund’s 2011 holdings and voting data are also now online on its web site.
One feature of the report is that the fund more than halved the proportion of assets under external management to 4.4% – it terminated 18 equity and fixed income mandates in the year. Link