Written By: Emma Websdale
The newly formed Government of Norway has announced consideration of establishing a mandate for the country’s sovereign wealth fund to invest in renewable energy.
This week’s release of Norway’s new Government program has included a commitment to consider establishing a mandate for the Government Pension Fund Global (GPFG) –the world’s largest sovereign wealth fund, to invest into renewable energy.
If the $720 billion fund allows its portfolio to include direct investments into assets like solar and wind plants, the total flow of capital to the renewable energy sector could significantly increase, allowing a substantial move away from the fossil fuel industry.
“If Norway actually did this, it will be an unprecedented shift in both the global investment community and also for tangible action on climate change”, said Samantha Smith, leader of WWF’s Global Climate & Energy Initiative.
“We now look to the Government of Norway to take the next step by putting thoughts into action.”
According to Renew Economy, if the fund allocated up to a 5% of its investment into renewable energy-related infrastructure, it could provide $10 billion a year to the green energy investment market from 2015 –making the fund one of the world’s largest single clean energy investors.
“Norwegian savings could change the world”, said Nina Jensen, CEO of WWF-Norway. “This would provide a powerful boost for the shift from fossil fuels to renewable energy.”
The sovereign wealth fund, owner of 1% of global shares, also announced the release of a special program to utilize the fund to invest in sustainable companies and projects in developing countries and emerging markets.
The Government of Norway’s action directly follows last week’s call from several prominent environmental groups, including the World Wildlife Fund (WWF), Greenpeace and Friends of the Earth Norway who urged the Government Pension Fund to consider new investment strategies including diverting funds from coal investments into renewable energy infrastructure.