Nicolai Tangen, CEO of Norges Bank Investment Management, speaks at a press conference on the company’s 2024 annual results at Norges Bank in Oslo, Norway, on January 29, 2025.
Ole Berglsten | AFP | Getty Images
Norway’s $2 trillion oil fund, one of the world’s largest investors, announced Thursday that it is now using AI to screen investments for potential reputational and ethical risks.
Norges Bank Investment Management (NBIM) manages the Fund. The fund was established in the 1990s to invest profits from Norway’s oil and gas industry. The company has invested in more than 7,200 companies in 60 countries and holds approximately 1.5% of the world’s listed stocks.
It has long influenced global markets and ESG (environmental, social and governance) investing. The firm uses its influence and voting rights to set expectations for the companies and markets in which it invests, including their impact on people, the environment and society.
The fund’s management team said in its annual responsible investment report that it is now leveraging AI to provide governance and sustainability insights to portfolio managers.
The technology means it can expand the scope and scale of information analyzed, leading to “faster identification of critical risks,” NBIM said.
An NBIM spokesperson told CNBC that the organization’s ESG risk monitoring team first began using Anthropic’s Claude AI model in its daily operations in November 2024. Since then, NBIM has become “an important tool in monitoring ESG risks across portfolios,” he said.
NBIM said in a report on Thursday that 2025 will see the introduction of large-scale linguistic AI models to screen all companies on their first day of entry into stock portfolios.
“These tools can help quickly scan a wide range of public information beyond what data vendors typically cover,” the report states. “If risks emerge in relation to important themes, LLM will conduct a more detailed investigation and provide a contextualized overview.”
NBIM receives AI-generated risk assessments daily for investments made in the previous day, which allows the team to immediately consider ways to reduce risk, the fund manager said.
“Within 24 hours of investment, AI tools alert new companies in the fund’s equity portfolio to potential links to forced labor, corruption, fraud, etc.,” NBIM said in a Thursday report.
“In many cases, this information is not included in international media reports or data vendor warnings. We always review information before making any investment or risk decisions. In multiple instances, we have identified and sold these investments before the market as a whole reacted to the risk, avoiding potential losses.”
NBIM said using AI in this way is particularly valuable for investigating small and medium-sized businesses in emerging markets, where news about the company may be limited to smaller media outlets in local languages.
“Artificial intelligence is changing the way we work as investors,” NBIM CEO Nicolai Tangen said in a statement on the report, adding that sustainability and governance “are inseparable from financial performance” and noted that “the world remains complex and uncertain.”
The fund’s value is approximately $2.2 trillion. In 2025, it will post an annual profit of 2.36 trillion kronor ($246.9 billion).
Nearly 40% of NBIM’s investments are in U.S. stocks, with its most valuable holdings including a 1.3% stake in Nvidia, a 1.2% stake in Apple, and a 1.3% stake in Microsoft. NBIM also invests in fixed income, real estate, and renewable energy infrastructure.
But last year, some ethics-related decisions drew criticism, particularly from the White House.
In September, the U.S. State Department told CNBC that it was “deeply troubled” by NBIM’s decision to exit its positions in U.S. machinery maker Caterpillar and five Israeli banks, citing an “unacceptable risk” that the companies were complicit in rights abuses in the Palestinian territories.
A spokesperson said NBIM’s withdrawal from Caterpillar “appears to be based on unwarranted allegations against Caterpillar and the Israeli government.”
Norway’s Finance Minister Jens Stoltenberg responded that the sale was “not a political decision.”
The Norges Bank board has until November 2025 to decide whether to remove the company from the fund’s investment portfolio or place it on a watch list. These decisions were informed by the Ethics Council, an independent body appointed by the Norwegian Ministry of Finance.
However, following controversy surrounding part of the company’s sale last year, interim guidelines have been established and a review of NBIM’s ethics framework is expected to be presented by a government-appointed committee later this year.
Under the interim guidelines, Norges Bank will no longer be able to decide whether to monitor or exclude companies from the fund, although it may reverse previous decisions to exclude or place companies on the watch list. Meanwhile, the Ethics Council has been stripped of its power to recommend observations or exclusions, at least until a review of the ethics framework is completed.
“The Gaza conflict and the debate over the Fund’s ethical framework and investments in Israel have shown how complex and difficult this will actually be in 2025,” Tangen said in Thursday’s report.
“While the Fund’s ethical framework is under revision, we will continue our responsible investment practices, strengthen the link between ownership and investment decisions, and focus on what is financially material.”
