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The Cambridge-Oslo connection

Norway’s Sovereign Wealth Fund advised by panel including Elroy Dimson.

Oslo
An expert panel that includes Elroy Dimson, professor of finance and chairman of the Newton Centre for Endowment Asset Management at Cambridge Judge Business School, recommended in a report to Norway’s Sovereign Wealth Fund (SWF) that divestment from fossil fuels was not an appropriate strategy for the Fund to follow when addressing the challenge of climate change.

Elroy commented that:

For a fund as large as Norway’s it is inappropriate to exit from fossil-fuel stocks. With Norway’s muscle, there is more to be gained by engaging with companies, regulators, and governments. That is a big agenda for the Fund.

The report “Fossil-fuel investments in the Norwegian Government Pension Fund Global: Addressing climate issues through exclusion and active ownership” requested by the Norwegian Parliament recommended that the $870 billion Fund support climate change research and suggested a mechanism for excluding companies on a case-by-case basis where there is an “unacceptable risk” that the company’s actions are “severely harmful to the climate.”

“By engaging on climate resilience and transition strategies for fossil fuel companies, the Fund will be actively managing the climate change related risk exposure to its portfolio and protecting the long-term value of its investments,” the six-member Expert Group panel, including Dimson, said in its 71-page report.

In addition to his role at the Newton Centre for Endowment Asset Management, Dimson is chairman of the Strategy Council for the Norwegian Government Pension Fund Global.