Norway's $1 trillion sovereign wealth fund, the Government Pension Fund Global, is calling on companies whose business affects the world's oceans to work to limit pollution.
The world's largest investment fund, which has stakes in 9,000 companies in more than 70 countries, wants firms' boards to integrate ocean sustainability into their strategies and risk management, to improve disclosure and to be transparent regarding ocean-related governance.
Businesses affected include shipping, offshore oil and gas, offshore wind farms, fishing, marine tourism, and land-based industries such as waste management, mining, agriculture, chemicals and consumer goods, the fund said in a so-called expectation document. It has previously published similar documents on climate change, water management, children's rights, human rights and corruption, as a means of telling companies what it expects from them.
Food and beverage firms could disclose end-of-life solutions for plastic used in their packaging; fishing businesses should be transparent about how much fish they catch, where they catch and how that might affect future fishing stocks. Businesses involved in agriculture, mining, waste management and other activities that can result in marine pollution from the land should try to prevent or significantly reduce pollution.
About 1,000 companies in question
The fund's exposure to such ocean-related businesses is about 475 billion Norwegian kroner in about 1,000 companies, according to a spokeswoman for the fund. According to its criteria, the companies in question have "at least 20% of their business model related to the oceans, based on the oceans or that influence the oceans."
"As a large, global fund we have a broad exposure towards companies exposed to the oceans. These companies may have a negative impact on the ocean and evolving regulatory and consumer attitudes towards more sustainable uses of the ocean present both risks and opportunities for the companies. We therefore saw the need to set out our clear expectations towards the companies we are invested in on ocean sustainability," she said.
While the expectations are not binding, the fund's spokeswoman said it would use them as a basis for dialogue with companies that it invests in to encourage them to act responsibly on their ocean exposure.
"What we have done on climate change, water management and children’s rights is to map how companies report on these issues," the spokeswoman said. "We hope to be able to measure how companies report on ocean sustainability as well, but to do this we need good numbers from the companies along the metrics described in our expectation document."
She said the fund would use its voting rights in companies, if needed, to ensure adherence to its expectations.
"In smaller companies where we do not see that the company has a sustainable business model, we might choose to do a risk-based divestment. We have divested from around 200 companies since 2012 based on assessments of [environmental, social and governance] factors," she said.
In a separate document, the fund also set out how it could support the UN's sustainable development goals, which aim to achieve sustainable economic, social and environmental development by 2030, through its attempts to strengthen governance and disclosure and by exiting from companies that are not sustainable enough.
As of Sept. 7, 2018, US$1 was equivalent to 8.43 Norwegian kroner.