To: , leader of the Conservative Party , leader of the , leader of the Christian Democrats , leader of the Social Oslo, October 5, 2013

A MORE LONG-TERM NORWEGIAN GOVERNMENT PENSION FUND GLOBAL

Norway’s state revenues from petroleum activities constitute the source of financial capital for the Norwegian Government Pension Fund Global (GPFG). The government assumes through this a substantial responsibility to secure our pensions, but also to contribute to a more sustainable development.

The GPFG’s size and long-term investment horizon sets it apart from many other funds. Its current investment strategy limits the GPFG to invest in listed equities, fixed income (bonds) and real estate, thus limiting the possibility to take advantage of the GPFG’s special characteristics. As the fund does not have on-going liquidity needs, it is particularly well suited to face the risks and potential premiums linked to investing in less liquid assets such as infrastructure and unlisted equities. This has also been highlighted by Norges Bank Investment Management (NBIM) in its letters to the Ministry of Finance in 20061 and 20102, but so far neither the government nor the parliamentary majority choose to take these technical advice into consideration.

Based on these considerations, the GPFG is well positioned to start investing directly into infrastructure, such as those for the production and distribution of energy from renewable sources, on the basis of both a financial and sustainability perspective. Such an expansion of the GPFG investment universe would contribute to reduced exposure toward climate-related risks, and at the same time it could lead to higher returns on the fund’s investment by allowing the GPFG to take advantage of its unique peculiarities as an investor. Other large European pension funds, including the Danish fund “Pension Danmark” and the Dutch fund “PGGM”, are already investing directly in renewable energy infrastructure. Given the size of the GPFG and its long-term horizon, it is reasonable to believe that it will have the same, or more, investment opportunities as other comparable funds.

The International Energy Agency (IEA) shows that it is crucial that institutional investors increase their share of direct investment in renewable energy infrastructure in order to secure their capital inflows and meet the international target to limit global warming to 2 degrees Celsius3. The Climate Policy Institute estimates that institutional investors alone could potentially meet 25% of project equity investment needs, and 50% of project debt needs with regard to renewable energy infrastructure4. State-owned and multilateral financial institutions have a key role to play here. The GPFG is in a unique position to become a model for many others similar funds.

Based on this, we propose that the GPFG should invest directly in infrastructure linked to also the production and distribution of energy from renewable sources. These investments should take place according to the international norms for responsible investment. In order to ensure that such an expansion of the GPFG investment universe is in line with the fund’s objectives, the signatories of this declaration suggest that a thorough assessment should be completed to define how these changes can be included in the current management of the fund.

1 Document available (in Norwegian): http://goo.gl/B73KYK 2 Document available (in Norwegian): http://goo.gl/SxsvdT 3 International Energy Association (2012): Energy Technology Perspectives 2012 Pathways to a Clean Energy System 4 Climate Policy Initiative (2013): The Challenge of Institutional Investment in Renewable Energy. This proposal is undersigned by:

Sverre Thornes Bernt Eidsvig CEO, Kommunal Landspensjonskasse (KLP) Bishop, Catholic Diocese of Oslo

Jan Erik Saugestad Arild Hemstad CIO, Storebrand Asset Management Leader, Future in our hands

Jens Ulltveit-Moe Marius Holm President and CEO, Umoe Leader, Zero

Alf Bjørseth Truls Gulowsen Chairman and CEO, Scatec Leader, Greenpeace

Nina Jensen CEO, WWF-Norway Leader, Friends of the Earth Norway

Kari Helene Partapuoli Silje Lundberg Director, The Development Fund Leader, Young Friends of the Earth Norway

Anders Bjartnes Director, Norwegian Climate Foundation