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Norwegian Government Pension Fund Norway (Norwegian Ministry of Finance and Folketrygdfondet)

PRI reporting framework 2020

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

Folketrygdfondet's investment strategy sets out the overarching principles for management of the Government Pension Fund Norway: "Folketrygdfondet’s mandate assumes a connection between sustainable development and the opportunity to secure financial returns in the long term. We safeguard our financial interests by exercising our ownership and creditor rights in an active, responsible manner." ( The full strategic plan for the management for the Government Pension Fund Norway is available here:

The investment strategy should be read in conjunction with our mandate:, principles for responsible investment:, more detailed guidelines for Folketrygdfondet's active ownership:, as well as the annual ownership reports ( and expectation documents for portfolio companies related to responsible investment (

These include specific documents related to Folketrygdfondet's expectations for portfolio companies' approach to strategy, capital structure, and financial targets; executive remuneration; climate change; human rights and labor rights; anti-corruption; and the environment; as well as specific recommendations for bond issuers and managers.

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

Folketrygdfondet's principles for responsible investment apply to all asset classes.  Folketrygdfondet's board reviews the overall strategy for responsible investment annually, affording the opportunity to incorporate any material changes in the underlying ESG risk for each asset class over the previous year to further develop our approach. Fixed income - SSA investments are limited to Nordic sovereign and municipal bonds, which are subject to state guarantees, and therefore face extremely low financial risk due to ESG factors. As a result, Folketrygdfondet does not conduct systematic ESG work on a rolling basis for this asset class, beyond the annual review.

01.6. Additional information [Optional].


SG 01 CC. Climate risk

01.6 CC. Indicate whether your organisation has identified transition and physical climate-related risks and opportunities and factored this into the investment strategies and products, within the organisation’s investment time horizon.

Describe the identified transition and physical climate-related risks and opportunities and how they have been factored into the investment strategies/products.

To effect a meaningful expansion of their climate-risk analyses, investors generally require better information access, quality and standardisation. Key questions in this regard are whether aggregated company information accurately represents investors’ climate risk and whether ‘top-down’ analyses of investor climate risk should be developed. Taking Folketrygdfondet’s distinctive characteristics into account, it appears most sensible to start with a ‘bottom-up’ assessment of climate risk in the portfolio. This is why, in 2018, we collaborated with several other Norwegian investors to engage in active ownership with companies in industries identified by the TCFD as particularly exposed to climate-related risk. These included companies in the energy, oil service, consumer staples and materials industries in 2018.


Folketrygdfondet continued this dialogue with companies in the transport, building and construction, and real estate sectors in 2019. Further, climate risk is incorporated into Folketrygdfondet’s ongoing dialogue with portfolio company management in Norway and the other Nordic countries. The insights gained through this dialogue are used to further evaluate the portfolio under different climate scenarios. One example of this is that our portfolio managers present their climate risk assessments for each of the priority sectors to Folketrygdfondet’s investment committee. The purpose is to develop our own qualitative scenario analyses of potential developments by sector and company, to secure a more nuanced understanding of the portfolio’s climate risk.


As an active manager, Folketrygdfondet has the opportunity to adjust portfolio weightings in response to changes in the financial risk profile. Our strategy for achieving excess returns is further explained in Folketrygdfondet’s strategic plan (please see, English pages), which identifies political developments, structural trends, sector dynamics and other material changes in framework conditions as some of the assessment factors included in our analyses. Our investment decisions are underpinned by broad-based information-gathering, analyses and contact with companies, including ESG analysis

01.7 CC. Indicate whether the organisation has assessed the likelihood and impact of these climate risks?

Describe the associated timescales linked to these risks and opportunities.

Over the short term, Folketrygdfondet incorporates the risks and opportunities related to climate change as an integrated assessment of sector weights. We also conduct company-specific evaluations in relation to the issuer's production and market position, as well as our position relative to the benchmark. It is important, however, to note that this is not an isolated evaluation of climate risk, but rather, part of a quantitative and qualitative assessment of all relevant factors, including pricing, return on capital, etc. The specific timescale for risks and opportunities related to climate change will vary by company and by sector, such that it is not possible to communicate a meaningful aggregate figure for the entire portfolio.

01.8 CC. Indicate whether the organisation publicly supports the TCFD?

01.9 CC. Indicate whether there is an organisation-wide strategy in place to identify and manage material climate-related risks and opportunities.


In 2018, the board approved the amendment of Folketrygdfondet's principles for responsible investment to provide explicitly that: "The Government Pension Fund Norway shall continuously assess and manage material sustainability-related risk, both threats and opportunities."

In addition, Folketrygdfondet's CEO approved the inclusion of "Sector-related or systematic sustainability risk", including climate risk, as a core element of Folketrygfondet's exercise of ownership rights:

1.10 CC. Indicate the documents and/or communications the organisation uses to publish TCFD disclosures.


          Folketrygdfondet's ownership report contains an index with page references to the relevant TCFD disclosures.

SG 02. Publicly available RI policy or guidance documents


02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.


02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

02.3. Additional information [Optional].




SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

Our guidelines on the operationalization of responsible investment provide that in the event that there exists a conflict of interest between our different portfolios, we prioritize the long-term financial interests of the fund. Further, if a conflict between creating returns in our portfolio and enhancing long-term value creation for an investee company arises, we prioritize the latter.

03.3. Additional information. [Optional]

SG 04. Identifying incidents occurring within portfolios

04.1. Indicate if your organisation has a process for identifying and managing incidents that occur within investee entities.

04.2. Describe your process on managing incidents

Folketrygdfondet subscribes to a controversy alert news service, which provides alerts on incidents involving companies in our portfolio on a rolling basis. Our dialogue with companies is both proactive and reactive. A proactive dialogue is the ongoing dialogue in which we are updated on the company's operations and challenges. A reactive dialogue is linked to a specific event that requires the company to implement measures and actively relate to what has happened.