Investment giant NBIM implores SBTi to simplify its approach
Norges Bank Investment Management (NBIM), the investment manager for the Norwegian government pension fund with assets totaling $1.7 trillion, has expressed support for the Science Based Targets initiative’s (SBTi) goal of driving companies towards net zero emissions by 2050. However, NBIM has criticized the draft revised net-zero standards as being overly complex and technically unrealistic.
In a consultation response submitted to the SBTi in March, Carine Smith Ihenacho and Eivind Fliflet, authors of NBIM's response, emphasized the importance of widespread, meaningful climate action over “technical perfectionism” in setting net zero targets.
NBIM’s approach includes encouraging portfolio companies to align with net zero 2050 by adopting credible, science-based short-, medium-, and long-term targets covering scope 1, 2, and significant scope 3 emissions. They manage climate risks by engaging actively with companies on transition plans, integrating climate considerations into investment decisions, and divesting from companies with unmitigated climate risks.
Regarding carbon credits, NBIM emphasized that any carbon credits used must "represent additional and verified emission reductions". However, the provided documents do not explicitly detail NBIM’s stance on carbon credits in detail.
NBIM also signaled openness to expanding its remit toward stricter climate goals within its responsible investment framework but highlighted the need for standards that are practical and foster broad adoption rather than overly technical criteria that could hinder action.
In summary:
- NBIM supports the SBTi’s net zero goals but calls for balanced, realistic standards focused on action rather than technical complexities.
- NBIM's stance on carbon credits implies cautious use, emphasizing credible, direct emissions reductions.
- NBIM is open to broadening its climate action mandate within practical limits.
The Science Based Targets initiative has become a key benchmark for corporate net zero commitments, with more than 4,000 companies worldwide having adopted its standards. The SBTi's consultation on net zero standards remains open until 1 June, and the SBTi net zero standards consultation did not elicit a comment from NBIM regarding carbon credits and their role in meeting net zero goals. The SBTI's approach to carbon credits remains a topic of debate.
- NBIM, advocating for actionable climate solutions, encourages companies to adopt science-based targets aligned with net zero emissions by 2050, emphasizing the importance of balanced, practical standards in the process.
- In consideration of carbon credits, NBIM maintains a focus on genuine, verified emission reductions, though specific details about their stance on carbon credits within the context of net zero goals remain undisclosed.
