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Responsibility for Emissions: the Case of the Swiss National Bank’s Foreign Exchange Reserves and the Norwegian Oil Fund

Author

Listed:
  • Naef Alain
  • Klooster Jens van ’t

Abstract

Should public investors take responsibility for the greenhouse gas emissions of the firms that they invest in? This paper answers this question through a comparative study of two very different investors: the Swiss National Bank (SNB)’s foreign exchange portfolio and the world’s largest sovereign wealth fund, the Norges Bank Investment Management (NBIM), the Norwegian sovereign wealth fund. Although both funds target positive returns, the SNB presents itself as a market neutral investor, whereas the NBIM is one of the world’s leading public ethical investment vehicles. Despite having a carbon footprint 10 times higher than the SNB, the NBIM potentially has a more positive impact to stop climate change. The NBIM uses divestment, shareholder engagement and moral leadership to try to mitigate the impact of its portfolio. The SNB on the other hand has a mainly passive approach, with only some minor exclusions. Comparing the impact of their strategies, the paper provides the first detailed study of the powers available to public investors in pursuing environmental objectives.

Suggested Citation

  • Naef Alain & Klooster Jens van ’t, 2022. "Responsibility for Emissions: the Case of the Swiss National Bank’s Foreign Exchange Reserves and the Norwegian Oil Fund," Working papers 872, Banque de France.
    • Handle: RePEc:bfr:banfra:872
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    Citations

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    Cited by:

    1. Macaire, Camille & Naef, Alain, 2021. "Impact of Green Central Bank Collateral Policy: Evidence from the People’s Bank of China," SocArXiv cmwpn, Center for Open Science.
    2. Naef, Alain, 2024. "The impossible love of fossil fuel companies for carbon taxes," Ecological Economics, Elsevier, vol. 217(C).
    3. Camille Macaire & Alain Naef, 2023. "Greening monetary policy: evidence from the People’s Bank of China," Climate Policy, Taylor & Francis Journals, vol. 23(1), pages 138-149, January.
    4. Fang, Fang & Si, Deng-Kui & Hu, Debao, 2023. "Green bond spread effect of unconventional monetary policy: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 398-413.

    More about this item

    Keywords

    Public Investors; Carbon Footprint; Public Investment; Shareholder Engagement;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • P18 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Energy; Environment
    • Q35 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Hydrocarbon Resources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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