The financial arrows point in the right direction on the boards he sits with in the Oil Fund’s premises in New York. Right now it is the tech sector that is raking in money and lifting the fund. But what worries Nicolai Tangen is what he sees within the companies’ climate work. The brake is on. – American investors sit in the back seat and are less forward-leaning for the green shift, believes the head of the Oil Fund. Biden drops Dubai This week several heads of government are flying to Dubai for the UN climate summit COP28. US President Joe Biden is not among them. US President Joe Biden is on the campaign trail. Here he speaks to 2,000 shipyard workers in Philadelphia about the need for a green transition. Photo: AFP Biden is sending Vice President Kamala Harris to the climate summit, where it is expected that countries will push for an agreement to phase out coal, oil and gas. – We are seeing a backlash in the US. It is a setback for the climate work, says Nicolai Tangen. If it continues, it could be unfortunate for the values in the Oil Fund, he believes. Anti-sustainability on the rise Climate issues have long been part of the culture war in the USA. The two major parties have completely opposite views on what needs to be done. Donald Trump reversed or cut 100 climate and environmental measures as president. If he is re-elected, he will be open to more oil exploration and coal mining. Photo: Reuters President Joe Biden has warned that climate change threatens the country and all its citizens. Biden’s political rival, Donald Trump, pokes fun at electric cars and rising sea levels. – The Oil Fund is consistent that companies should carry out climate work, but there is less pressure from other investors now, says Tangen. He believes that sustainability secures the values, which help finance the Norwegian welfare state. Wind farms, like this one in McCook, Texas, belong to the ESG category. Investors and politicians disagree about whether this is a label that just costs more or whether ESG is helping to save the world. Photo: AP In the US, the trend is called anti-ESG. Some conservative politicians, such as Florida Governor Ron DeSantis, have referred to ESG as woke capitalism. ESG can be translated into environmental, social and business ethics. It has been an important criterion for over 60 per cent of investors in North America that the companies have had an ESG plan. Then the lobby came into play. In Congress and at least 37 states, there are attempts to stop ESG requirements for companies. Plural Policy has registered at least 156 bills, which would make it prohibited for public bodies to buy services from companies that, for example, do not want to cooperate with the oil industry. The US takes green shares At the same time, President Biden’s ambitious plan for green transition, known as the Inflation Reduction Act (IRA), is popular with companies and investors. What is Biden’s Inflation Reduction Act (IRA)? Despite the name, this is the largest climate and energy investment in the USA Tax breaks and support schemes are given to environmentally friendly industry, as long as the product is made in the USA Almost 370 billion US dollars are set aside for investments and subsidies over the next decade The ambitious goal is renewable energy in homes, as well as zero emissions in transport and industry The Green Transition Act was passed by Congress in August 2022 source: The White House The US’ heavy commitment to climate and the environment can have financial consequences for Norway and Europe. – Biden’s green plan is a carrot fog. All companies based in the USA can benefit from it, believes the Oljefond manager. Nicolai Tangen believes President Biden’s green plan, known as the IRA, is a carrot fog. He believes it could have major economic consequences for investments in Norway and Europe. Photo: Anders Tvegård / news – It is now more attractive for industry and business to establish themselves here than in Norway, he says. Tech companies bigger than countries – Seen from a financial point of view, things are going quite well in the USA. The large companies in which we have stakes are doing well, says Tangen. The oil fund has shareholdings in, among others, Apple, Microsoft, Nvidia, Amazon, Alphabet and Meta. The price fluctuates, but right now the value of the tech companies is high. After a decline in 2022, the technology-heavy Nasdaq index has grown by over 45 percent so far this year. Photo: AFP The oil fund earned NOK 500 billion in the first half of the year from the largest American technology companies. – Google (Alphabet) is bigger than all listed companies in Sweden, and in Sweden they have many good companies. So the power these companies have gained is great, says Tangen. American benefits Tangen has met around 30 business leaders during his stay in the US this autumn. The impression he is left with is that American businesses perceive European countries as more time-consuming and problematic than before. He therefore believes that developments in the US will continue to strengthen, and that the US will remain an attractive market. – They say that it is more difficult to operate in Europe because of regulations. In the US, it is more accepted to fail and there is more risk capital. – Here they have more hairy goals. Entrepreneurs think more outside the box, says Tangen.
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