ESG duds have nowhere to hide, world's top stock owner says

The chief executive of the world's largest stock owner says life is about to get a lot harder for companies that fail environmental, social and governance tests set by institutional investors.

"You're not going to get any clients...if you are not sustainable," says Nicolai Tangen, who runs Norges Bank Investment Management. | Photo: Ntb Scanpix/Reuters/Ritzau Scanpix/via REUTERS / X02351

Nicolai Tangen, who runs Norges Bank Investment Management from Oslo, says the degree to which ESG dictates a company's prospects is "starting to hit now".

Firms that don't adapt face a world in which financing will dry up, insurance companies will walk away, employees will defect, social-media shaming will intensify and customers will disappear, he said in an interview.

As CEO of Norway's wealth fund, Tangen oversees about USD 1tn worth of stocks, which represents roughly 72 percent of the total portfolio. The rest is in bonds, real estate and renewable energy infrastructure.

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