World’s biggest wealth fund Norges Bank Investment Management will screen companies’ ESG score, before adding them to its portfolio, according to Bloomberg. The $1.4 trillion fund aims to dodge the risk in environmental investing in a move that shifts away from relying on indexes.
Organizations that include Amnesty International says Norges’s move allows it to explore ethical standards of companies in the absence of proper regulatory guidelines.
The move by Norges reflects growing concerns that the “S” in the Environmental, Social, and Governance investing, or ESG, leaves room for misinterpretation.
Norges tries to keep its portfolio ESG compliant, given the magnitude of stocks it holds across the world.
The pre-screening process of companies by Norges is expected to begin in the second half of the year.