PARIS: Norway's Prime Minister Erna Solberg on Tuesday said she had no immediate plans to toughen a rule that means a firm generating about a third or more of its income from coal is excluded from the country's $1 trillion sovereign wealth fund.
Norway's parliament in 2015 ordered the fund, built on revenues from the country's vast offshore oil and gas industry, divest from companies which derived more than 30 percent of their turnover or activity from coal.
Asked if that threshold might be toughened, Solberg told Reuters: "I think it is at the right level. We have to acknowledge that a lot of these fossil (fuel) companies ... are diversifying. A lot of the funding for renewable energy comes from (fossil fuel) sources."
"So for the current time I think 30 percent is OK, and maybe it will be lower in the future," she said in Paris, where she is attending a climate change financing summit.
Solberg said Norway would support an initiative launched at the meeting by French President Emmanuel Macron for sovereign wealth funds to demand more rigorous environment-related corporate governance from the firms they invest in.
The group, called the "One Planet Sovereign Wealth Fund Working Group", includes funds from New Zealand, Kuwait, Qatar, Saudi Arabia, Norway and Abu Dhabi, according to a draft document.
Norway's fund already demands that larger companies provide details on how they measure their carbon dioxide footprint and how they plan to reduce those emissions.
Institutional investors needed to put a price on climate risk to safeguard returns on their investments, she said.
"The risk is that economies will change if we have too high emissions," Solberg said. "There is also a responsibility for investors to promote new technology and see what kinds of companies will have the best returns in the future."
"And remember there will probably be higher costs to emissions in the future ... so if you look at long term and not quarterly returns then you will have to estimate climate risk better."
Norway's fund has proposed dropping oil and gas companies from its benchmark index to diversify away from hydrocarbons given the economy is built on oil and gas. That would mean cutting its investments companies such as Royal Dutch Shell , BP, Chevron and Exxon Mobil.
The government is holding a review and Solberg reiterated her government's intention to make a recommendation to parliament -- which must vote on such a move -- next year.
Solberg's conservative-led government rules in a minority, and is dependent on two smaller environment-friendly parties to win backing for its policies.
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