How climate change may affect the Government Pension Fund Global
An expert group will examine how climate change, climate policy and the green transition may affect the Government Pension Fund Global. NHH finance professor Karin Thorburn is appointed member of the expert group.
`We need more knowledge on how the transition towards a low-emission economy could affect the pension fund's exposure to climate risk and climate-related investment opportunities. This expert group will provide important insights into these matters`, Minister of Finance Jan Tore Sanner (Conservative Party) says in a press release.
The Ministry of Finance emphasises how climate change, climate policy and the green transition may affect the Fund management, risk, and return. Norges Bank incorporates assessments of financial risk arising from climate change in both risk management, investment decisions and ownership activities. Furthermore, the ethically motivated guidelines for observation and exclusion of companies from the Fund include several criteria on climate and the environment.
The group will be headed by Martin Skancke (chairman of the board of PRI, member of TCFD and board member of Storebrand). Other members will be:
- Kristin Halvorsen (executive director of CICERO)
- Tone Bjørnstad Hanstad (investment professional at Ferd)
- Karin S. Thorburn (finance professor at NHH).
The secretary of the group will be Thomas Ekeli (former chief economist at Folketrygdfondet). The expert group will submit its report by 15 August 2021.
Key objectives:
In order to provide the Ministry of Finance with a foundation for further deliberation, the report should provide insight into the significance of financial climate risk and climate-related investment opportunities for a fund with GPFG characteristics. The report should discuss alternative approaches to addressing these issues in the management of the GPFG.
The report should further discuss whether new, climate-related knowledge carry importance as to the key premises underpinning the fund's investment strategy, including implications for the operational management. As part of this analysis, the report should discuss how financial climate risk affects financial markets, properties of such risk relative to other elements of financial risk, including to what extent climate risk is priced in financial markets.