The CEO of the Norwegian Wealth Fund arrived for the first time in his tenure at the World Economic Forum in Davos this week, carrying a sharp and sharp message to global companies regarding the need to care for the environment, the recession of greed and the pursuit of astronomical executive salaries and thanks to the diversity of the members of the directors.
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Nikolai Tangen, who manages more than 1.3 trillion dollars, which actually holds 1.3% of the capital of all traded companies in the world, said in an interview with the “Bloomberg” agency that “I came to Davos to make a clear message: we think that the boards of directors should act more sharply regarding the climate” . He even threatened that as owners of holdings in the companies, the fund “will vote against plans of executive members who do not have a cohesive concept regarding the reduction of greenhouse gas emissions.”
Tangen, who has been at the head of the Norwegian Investment Fund since September 2020, also said that “We aim to focus on executive salaries as well. We feel, especially in the US, that corporate greed has crossed all limits, and we also aim to strengthen human diversity among executive members.”
According to Tangan, the fund has already voted against several plans of executive members in which it sits in the last year due to “huge salaries”, and the dialogue that opened with the companies led to the clarification of the positions on the part of the wealth fund. “We’re seeing different pay packages this year,” he said. In fact, the Norwegian economist, who previously served at a hedge fund, repeated in an interview what he wrote in a special column for the “Financial Times” before his arrival in Davos.
“The value of the wealth fund in an uninhabitable world is exactly zero”
The Norwegian Wealth Fund was established in the 1990s to manage the Scandinavian country’s huge revenues from the fossil fuels it produces in huge quantities. It has so far accumulated a record amount, is considered one of the largest wealth funds in the world, and in the year of recovery from the corona, it even recorded profits of more than 110 billion euros in just six months. In the past year, the fund’s profits collapsed by 14%, with the drop in stock markets around the world, and Tangen warned in previous interviews that investors should “expect much lower returns in the near future.”
Some of the fund’s characteristics are investments in accordance with ethical considerations, and it has diverted investments in the past from Israeli companies that were involved in activities in the territories. Last month, the fund caused an uproar in Israel when it was revealed that it is also considering diverting investments from several financial companies, which it says are involved in Israeli activities in the territories.
In his words in Davos, Tangan emphasized the need to invest according to ethical considerations in the climate field. That is, according to him, investment in “pure” fossil fuel companies should be avoided, companies should be required to present plans to reduce greenhouse gas emissions and include climate considerations in business considerations. Tangen justified the extensive involvement in these areas: “The value of the wealth fund in an uninhabitable world is exactly zero.”
Tangen also warned against the return of inflation to Western economies, after recent months have seen a modest downward trend in price indices in the US and Europe. “One of the big things this year is going to be what will happen to global inflation when China gathers momentum again (China abandoned the “zero tolerance” policy to Corona and opened its borders in the last few days, AA)… I believe that this is going to be an inflationary process, and there is a chance that it will accelerate again as a result. It will be very bad for the markets.” In such a state of affairs, he estimated, the central banks will maintain high interest rates, which will stifle economic activity.
The problem with such a scenario, he said, is that “there will be nowhere to make money.” If that’s the case, he said, “You’re going to lose money in the bond market, the stock market and the real estate market. There’s going to be nowhere to hide.”