Avslutning av Klimahandlingsplan 2025
Klimahandlingsplanen vår for 2025 hadde som mål å håndtere klimarisiko og -muligheter for fondet gjennom tiltak på markeds-, portefølje- og selskapsnivå. Her gir vi en detaljert vurdering av gjennomføringen.
Vurderingen er på engelsk.
Norges Bank Investment Management manages the Government Pension Fund Global on behalf of the Norwegian people. The goal is to generate the highest financial returns within the management mandate laid down by the Ministry of Finance. This mandate specifies that responsible investment activities shall be based on the long-term goal that portfolio companies organize their activities to be compatible with global net zero emissions in accordance with the Paris Agreement.
In September 2022, the Executive Board adopted the 2025 Climate action plan for 2022-25. The plan focused on engaging our portfolio companies to achieve net zero emissions by 2050, with the ambition to be a leading fund in managing climate risks and opportunities. We developed twenty-five actions addressing climate risks and opportunities across market, portfolio and company levels, and reporting.
Climate and nature risks continue to pose challenges to the fund's long-term financial performance. During implementation, we observed encouraging corporate actions on climate risk, particularly during the first two years. However, global emissions continued rising, physical climate risks intensified beyond expectations, and the climate policy landscape grew increasingly uncertain with mounting regional disparities. This evaluation forms part of the basis for our updated 2030 Climate action plan.
Main outcomes in the period
Climate risk metrics
- Portfolio companies' emissions covered by science-based net zero targets increased from 57% to 76% from 2022 to July 2025.
- The fund’s financed emissions and weighted-average carbon-intensity (WACI) declined by 5 and 11 percent respectively from 2022 to 2024.[1]
Market level
- Supported the development of the IFRS Climate-related Disclosure Standard as the global baseline and advocated for regulatory adoption in 16 jurisdictions.
- Supported three new academic research projects to deepen understanding of climate and nature risks in financial markets.
Portfolio level
- Engaged with companies representing 71% of financed emissions, where own evaluation indicates that the quality of these dialogues increased over time.
- Systematically tracked engagement outcomes, achieving objectives with significant variation by type. Companies engaged on net zero targets specifically seem more likely to set targets than companies we did not engage.
- Voted against directors at 69 companies for inadequate climate risk management.
Reporting
- Published combined Climate and nature disclosures in 2025 to address the interconnected nature of climate and environmental risks.
- Presented results from an expanded set of analytical models to estimate the fund’s forward-looking climate risk.
2025 Climate Action Plan implementation
In the 2025 Climate action plan, we committed to incorporating our learnings from the implementation of the plan in an updated action plan with goals for the following five-year period up to 2030. This section reviews our progress, examining key portfolio climate risk metrics, the implementation status of our actions, and insights from our engagement effectiveness evaluation. We will conclude by explaining how these findings informed our new 2030 Climate action plan.
Detailed implementation information is provided in the appendix with a line-by-line evaluation of individual actions. The companion document 2025 Climate action plan Close out: Engagement effectiveness contains our research on the effectiveness of our climate engagements.
Developments in portfolio level climate exposures
In our 2025 Climate action plan we specify our ambition for our portfolio companies to set net zero 2050 targets as a matter of urgency, and all companies in our portfolio to have done so by 2040 at the latest.
By July 2025, we observed significant progress in corporate climate commitments: the share of the fund's financed emissions covered by science-based corporate net zero targets increased from 57% at the end of 2022 to 76%, a 33% improvement.[2] The year-on-year increase started to decline from 2023, as visible in chart 1. Additionally, the overall number of portfolio companies with science-based net zero 2050 targets almost tripled, increasing from 12% to 34% over the same period.
CHART 1
Percentage of the fund’s financed emissions covered by corporate net zero 2050 targets.
We expect the fund’s financed emissions to be largely driven by global developments. The fund does not have a specific goal to decarbonise the portfolio, other than through companies implementing their climate targets. If individual companies set and achieve net zero targets, their emissions should decline.
Our analysis supports this: companies meeting most of our climate expectations — including targets but also other elements such as board oversight — have reduced their absolute Scope 1 and 2 emissions since the Paris Agreement in 2015. Conversely, emissions have increased at companies falling short of our climate expectations. Further research on net zero targets indicates that stock prices incorporate new information on companies’ climate risk management. In 2024, we conducted an event study to examine stock price reactions to corporate targets being removed by the Science-based targets initiative (SBTi). We found a significant negative stock market response, suggesting that investors are concerned with companies setting climate targets, but not following up on them.[3]
Between 2022 and 2024, the fund’s financed emissions and WACI declined by 5 and 11 percent respectively, while the net asset value of the equity portfolio increased by 24 percent. Given that financed emissions naturally scale with fund size, this decline occurred despite substantial fund growth. The growth in the value of investments in the technology sector relative to higher-emission sectors largely explains these declining emissions metrics. We also observed a net decline in emissions from portfolio companies that reported their emissions at the beginning and end of the period.
CHART 2
Time series of key carbon metrics: WACI for scope 1 and 2 of the equity portfolio, financed emissions for scope 1 and 2 of the equity and corporate bond portfolio, and net asset value of the equity portfolio.
We measure the fund's exposure to climate opportunities. Between 2022 and 2024, the share of net asset value in the equity portfolio invested in companies providing “climate solutions” increased from 6 to 9 percent, largely reflecting the growing representation of technology and financial sector companies classified as climate solutions.
Despite these developments, the equity portfolio's implied temperature rise remains misaligned with achieving global net zero emissions by 2050. We calculate this metric by analysing companies' current carbon intensities, emission reduction targets, and sector decarbonisation pathways to project future emission trajectories. Using MSCI's implied temperature score, our portfolio-level metric reached 2.52°C as of 2024. This aligns with global emissions trajectory estimates and confirms that our portfolio largely mirrors the current global climate risk landscape.
Progress market level actions
Our implementation across our three-level strategy framework has been comprehensive. At the market level, we focused on sharing our knowledge and technical expertise to help shape global standards through targeted initiatives.
We particularly supported the development of the IFRS Climate-related Disclosure Standard as the global baseline for reporting financially material climate-related risks and opportunities. After its adoption in June 2023, we consistently advocated for regulatory adoption with no permanent deviations across jurisdictions through consultation responses, bilateral meetings and our chairmanship of the International Sustainability Standards Board (ISSB) Investor Advisory Group since July 2024. We engaged in 18 jurisdictions and are encouraged to see that all of them are adopting or have committed to adopting requirements aligned with the IFRS S2 standard on Climate-related disclosures.
Norges Bank also led the high-level group on the future development of the Network for Greening the Financial System (NGFS) long-term climate scenarios. The scenarios have become a common reference point for climate scenario analysis and stress-testing in the financial sector. The work aimed to strengthen the scientific robustness and operational relevance of the long-term climate scenarios.
To contribute to a better understanding of climate and nature effects on financial markets, we started giving financial support to three new academic projects. These projects focus on areas requiring deeper academic exploration, including the critical links between climate and nature risks.
Progress portfolio level actions
We made significant progress on our portfolio-level climate actions, fully implementing or advancing all five key initiatives. We published a Policy on Climate Risk, integrated net-zero targets into our unlisted real estate portfolio, and developed robust emissions analysis frameworks. We expanded our renewable energy infrastructure portfolio to capture the arising financial opportunities through one fund investment and nine direct investments in solar and wind assets in Europe. The portfolio is valued at 84.2 billion kroner at the end of June 2025. Our real estate portfolio’s carbon emissions intensity fell by 17 percent from 2019 to 2024, demonstrating our progress towards our interim target of reducing operational carbon by 40% by 2030.
We also enhanced our risk monitoring processes, and in 2024 for the first time reversed 8 divestment decisions for companies that demonstrated improved climate and nature risk management. Over the period 2022-24, we divested from 44 companies due to risks related to climate change, water management, or biodiversity and ecosystems.
Progress company level actions
At the company level, we have implemented all engagement actions, establishing clearer expectations and conducting more thorough assessments of companies against these updated expectations. We placed companies representing 70% of our financed emissions on an engagement focus list. In 2024 alone, companies standing for 54% of our financed emissions were engaged. We voted against 69 board directors for severe climate risk mismanagement.
Our investment-targeted actions made significant progress: we deployed proprietary climate analytics to assess companies' climate profiles, sharing insights across equity portfolio management. Three specialised listed energy investment mandates cover more than 400 companies across the global energy value chain. We have set specific net zero agendas for large holdings and implemented an evaluation process to identify companies for exclusion under the climate criterion. However, no company has been excluded as of October 2025. Developing more sophisticated analytics to inform investment decisions and targeted mandates remains a key focus for our upcoming 2030 Climate action plan.
Research on engagement effectiveness
This close out document primarily reviews the extent to which we implemented the specific actions of our 2025 Climate action plan. Beyond this implementation assessment, we have also sought to understand the plan's effects on companies and use these learnings to inform our updated climate action plan. Given that engagement was central to our plan, we conducted a comprehensive analysis of our engagement effectiveness to gain deeper insights into how our approach influences corporate climate management and disclosures.
Our analysis involved three detailed assessments, which are fully documented in the Climate action plan close out: Engagement effectiveness.
First, we examined the quality of our company meetings, the cornerstone of our engagement strategy. Using AI analysis, we assessed the proportion and quality of climate-related discussions with portfolio companies. Since 2015, both the frequency and depth of these discussions have increased, stabilising from 2021. During this climate action plan period, we observed notably more high-quality discussions compared to previous years.
Second, we analysed our self-reported engagement data to evaluate our net zero dialogue objectives. In most cases, we successfully shared our expectations and gained insights into company practices. Where we aim to influence company practices such as setting a net zero target, we have not yet achieved the majority of our objectives (noting that most engagements are still ongoing). We found that engagement success appears to correlate positively with market capitalisation. Companies already meeting a larger share of our climate management expectations were also more likely to respond positively to our engagements, providing valuable insights for future targeted interactions.
Third, we quantified our engagement impact by comparing net zero target adoption between engaged companies and a similar control group without existing targets. We focused on net zero targets as this is an important indicator of companies’ climate management, and we have good data showing when companies adopted such targets. The analysis indicated that engaged companies demonstrated higher target adoption rates.
Together, these analyses point to an improved engagement process and a positive influence on corporate strategies and disclosures. Although it is hard to isolate the effect of our ownership work from concurrent regulatory developments as well as engagements by other investors, the increase in engaged portfolio companies with robust net zero targets indicates that our engagement can contribute to improved corporate practices.
Progress reporting actions
Our reporting now provides a more detailed assessment of the fund's exposure to climate risks and opportunities. We began reporting financed scope 1 and 2 emissions using PCAF methodology and tracking upstream and downstream scope 3 emission estimates to reveal our exposure through supply chains and customer networks.
In 2023, we joined a group of financial institutions piloting nature-based disclosures recommended by the Taskforce of Nature-related Financial Disclosures (TNFD). To address the interconnected nature of climate and environmental risks, we published our first combined Climate and Nature Disclosures in 2024. This integrated report replaced separate Task Force on Climate-related Financial Disclosures (TCFD) and TNFD disclosures, providing more detailed insights into companies' climate and nature management. It also expanded our climate risk measurements for the equity portfolio, using multiple analytical models to estimate forward-looking metrics.
Our estimates of portfolio risk related to climate change show significant variations across risk measurement approaches. Using bottom-up approaches, we estimate equity portfolio losses of 2 to 10 percent to our global equity portfolio across different climate scenarios. This rises to 19 percent in our US equity portfolio under current policy scenarios when employing an alternative top-down approach. These latter estimates of the fund's climate-related equity risk are notably higher than the projections we had when developing the 2025 Climate action plan in 2022.
Looking ahead
The 2025 Climate action plan also included an Outlook section where we set the ambition to better understand and report on the results and outcomes of our active ownership activities. In this Close out, we aim to deliver on this expectation by showing the results of our activities, the developments in fund climate risk exposures, and detailed findings on our engagement effects.
We find that more companies set science-based net zero targets over the implementation period, leading to 76% of our financed emissions being covered by robust targets. Our detailed analysis on the effectiveness of our engagement efforts indicates that company engagement can contribute to companies' improving their climate management. Companies that meet our expectations over time also showed larger decreases in emissions compared to companies with poorer climate risk management. Despite these encouraging developments, we see that the forward-looking climate risk exposure of the fund went up.
In implementing our first climate action plan, we have established a robust basis for climate risk management for the fund at market, portfolio and company level. Supported by evidence on the effectiveness of our company engagements, the 2030 plan builds upon our previous plan with a focus on engaging our companies on financially material climate issues. The new plan also focuses on strengthening the integration of climate information in our investment decisions and expands our holistic approach to climate and nature risks and opportunities.
Line-by-line review
We have reviewed the implementation of all actions outlined in our 2025 Climate action plan, and we provide a detailed assessment by level.
[1] Financed emissions are calculated by first dividing the net asset value of all our equity and bond investments in a company by its enterprise value including cash. This is then multiplied by the sum of the company’s scope 1 and 2 emissions. The WACI is calculated by dividing a company’s Scope 1 and 2 emissions by its total revenue for the year and aggregated to portfolio level using each company’s relative weight of the equity portfolio’s net asset value.
[2] In this analysis, we only consider science-based corporate net zero targets for 2050 or earlier. These includes corporate targets that were approved by or committed to the Science-based Targets Initiative (SBTi) and other net zero 2050 targets that fulfil our expectations such as reducing Scope 1 and 2 emissions by at least 90%. Data coverage as of 31st of July 2025.
[3] See NBIM’s Climate and Nature Disclosures 2024 for the analysis on companies’ expectation scores and subsequent emissions performance and NBIM’s Responsible Investment Report 2024 on our event study on SBTI’s removal of corporate net zero targets.