WEBVTT - Norges Bank Investment CEO Nicolai Tangen Talks Going Green 0:00:02.440 --> 0:00:06.760 Bloomberg Audio Studios, podcasts, radio news. 0:00:08.400 --> 0:00:10.760 The journey to net zero is one of the biggest 0:00:10.840 --> 0:00:15.280 challenges humanity has ever faced. As temperatures keep rising, the 0:00:15.360 --> 0:00:19.079 devastating effects of climate change are becoming more severe. In 0:00:19.120 --> 0:00:22.040 this new series of Leaders with Lacwago's Green, we go 0:00:22.120 --> 0:00:24.800 beyond the headlines and speak to the people who are 0:00:24.800 --> 0:00:28.240 confronting the climate crisis through their work to learn how 0:00:28.280 --> 0:00:29.640 they're positioning. 0:00:29.120 --> 0:00:29.760 For the future. 0:00:30.600 --> 0:00:32.640 I begin with the man in charge of the world's 0:00:32.760 --> 0:00:35.960 largest sovereign wealth fund, valued at almost one point six 0:00:36.040 --> 0:00:40.320 trillion dollars. Norges Bank Investment Management is the biggest owner 0:00:40.320 --> 0:00:44.520 of stocks globally, with stakes in almost nine thousand companies. 0:00:45.400 --> 0:00:48.680 It was established to invest Norway's vast fossil fuel riches, 0:00:49.240 --> 0:00:52.440 but as the energy transition gains momentum, it's sought to 0:00:52.479 --> 0:00:57.000 reduce exposure to oil and gas. Instead of divesting, its 0:00:57.000 --> 0:01:01.360 strategy is to apply pressure from within. Nikolai Tangen has 0:01:01.360 --> 0:01:03.880 been at the top of finance for over three decades, 0:01:04.160 --> 0:01:09.640 but his toughest test may lie ahead. Thank you so 0:01:09.720 --> 0:01:11.920 much for joining us on Leaders with Lack What goes Green? 0:01:12.240 --> 0:01:13.600 So what does it take to be a leader in 0:01:13.600 --> 0:01:14.319 twenty twenty four. 0:01:14.680 --> 0:01:18.200 I think what it takes is more emphasis on empathy 0:01:18.920 --> 0:01:21.600 and in a world which is leading towards whether it's 0:01:21.600 --> 0:01:24.679 more machines, more AI, we need to lean more towards 0:01:24.840 --> 0:01:26.320 what is it that makes us human? 0:01:26.800 --> 0:01:28.720 So that whole thing is more important than ever before. 0:01:28.760 --> 0:01:30.759 But the world is so complex at the moment. How 0:01:30.800 --> 0:01:33.720 do you distinguish the noise from the facts. Well, that 0:01:33.840 --> 0:01:35.200 is also more important than ever before. 0:01:35.240 --> 0:01:38.920 It's to make that distinction and to just establish the facts, 0:01:39.280 --> 0:01:42.160 talk to people and just exclude all the noise, all 0:01:42.160 --> 0:01:43.160 the social media, all these. 0:01:43.080 --> 0:01:43.600 Kind of things. 0:01:44.240 --> 0:01:46.720 You're a leader almost like no other because you lead 0:01:47.000 --> 0:01:49.400 the largest sovereign wealth one in the world. You want 0:01:49.440 --> 0:01:52.840 to explain to everyone that's interested in what the Fund does, 0:01:52.880 --> 0:01:54.960 and you also have a podcast, you do investments. 0:01:55.360 --> 0:01:56.840 Like what kind of leader do you think you are? 0:01:58.400 --> 0:02:01.800 I think I am a very including leader. And the 0:02:01.800 --> 0:02:04.480 good thing by leading the people in the Fund is 0:02:04.480 --> 0:02:07.360 that they are just so smart and so clever, and 0:02:07.400 --> 0:02:09.400 so they don't need much leadership. They just need a 0:02:09.400 --> 0:02:12.079 bit of direction and then they figure it out themselves. 0:02:12.280 --> 0:02:14.720 But you've done quite a lot since since joining the Fund, 0:02:15.120 --> 0:02:17.160 and that was during the pandemic, how do you see 0:02:17.160 --> 0:02:17.960 the fund changing? 0:02:18.320 --> 0:02:21.079 It's interesting, but in some ways it's easier to make 0:02:21.160 --> 0:02:23.680 changes during a period like the pandemic, because people are 0:02:23.720 --> 0:02:27.040 at home and they are spread out, and so when 0:02:27.040 --> 0:02:29.640 you suggest some things, it's perhaps easier to get them to. 0:02:31.400 --> 0:02:32.079 Do the new thing. 0:02:32.200 --> 0:02:34.320 I don't believe that for one second. It's always hard. 0:02:34.440 --> 0:02:37.560 I mean, if it's hard to change culture, it's hard 0:02:37.600 --> 0:02:38.359 to change people. 0:02:39.040 --> 0:02:41.120 Well, you have to explain why you do it, and 0:02:42.560 --> 0:02:46.560 I think make even more sure than before that people 0:02:46.600 --> 0:02:47.520 have a true purpose. 0:02:48.040 --> 0:02:49.799 And so you have to distill down what is. 0:02:49.720 --> 0:02:51.239 The purpose of what you do, what is the purpose 0:02:51.280 --> 0:02:54.480 of your company, and make that very clear and repeat 0:02:54.520 --> 0:02:56.440 it and repeat it and repeat it. And it's very 0:02:56.480 --> 0:02:58.160 clear what all purposes is to make money for the 0:02:58.160 --> 0:02:59.040 Norwegian population. 0:02:59.400 --> 0:03:01.120 So why do you accept the job you were You 0:03:01.520 --> 0:03:03.000 had a great life, I mean, you had a. 0:03:02.919 --> 0:03:05.120 Hedge fund that was doing very well, you were earning 0:03:05.120 --> 0:03:07.280 lots of money. Well, I had a great love, I 0:03:07.320 --> 0:03:08.000 had a great life. 0:03:08.040 --> 0:03:10.359 But I still have a great life and you know, 0:03:10.919 --> 0:03:11.640 really good life. 0:03:11.760 --> 0:03:14.600 Now. I was very keen on that job because one 0:03:14.639 --> 0:03:17.160 I think it's one of the most important positions in 0:03:17.320 --> 0:03:20.520 as at management, Right, I love as at management in 0:03:20.600 --> 0:03:23.560 terms of the opportunity to develop that organization further. There 0:03:23.639 --> 0:03:27.600 was there were great opportunities, and I love organizational development. 0:03:27.880 --> 0:03:29.680 And then to do something nice for the country. I mean, 0:03:29.720 --> 0:03:32.280 these three things came together in the same job. 0:03:32.520 --> 0:03:34.400 Why do you love asset management because you can influence 0:03:34.600 --> 0:03:37.640 and change the future? Or is it being clever than 0:03:37.680 --> 0:03:38.120 anyone else? 0:03:38.160 --> 0:03:41.440 Asset management is the most interesting job in the world, 0:03:41.560 --> 0:03:43.240 perhaps after being at journalists. 0:03:43.560 --> 0:03:44.080 Why is that? 0:03:44.480 --> 0:03:47.440 Well, everything you eat, drink, drive, all these kind of 0:03:47.480 --> 0:03:49.640 things is made by a company. You have you need 0:03:49.680 --> 0:03:52.000 to understand psychology in terms of the companies. You need 0:03:52.000 --> 0:03:56.360 to understand the corporate culture of companies. And then these 0:03:56.360 --> 0:03:59.600 things change all the time. Right, you have the macroeconomies changing, 0:03:59.640 --> 0:04:03.640 interest is changing, currencies are changing, and you know, the 0:04:03.720 --> 0:04:06.120 data points are just changing all the time. You just 0:04:06.160 --> 0:04:09.040 couldn't invent a more fascinating game even if you try it. 0:04:09.200 --> 0:04:11.480 But it's harder now, I think, I feel it feels 0:04:11.520 --> 0:04:14.600 like things are changing faster. Right, Inflation forecasts straight forecasts 0:04:14.640 --> 0:04:15.559 are changing. 0:04:15.440 --> 0:04:16.480 Is changing very fast. 0:04:16.839 --> 0:04:19.479 So on the one hand, that means that you need 0:04:19.520 --> 0:04:22.560 to be very observant and agile At the same time, 0:04:23.160 --> 0:04:26.159 I think there is even more scope if you managed 0:04:26.200 --> 0:04:28.080 to be contrarian in what you do, and if you 0:04:28.160 --> 0:04:30.000 managed to be long term. I think that's where the 0:04:30.000 --> 0:04:32.960 money is. The big arbitrage now is to be contrariant 0:04:32.960 --> 0:04:33.640 and long term. 0:04:33.720 --> 0:04:35.560 What do you think markets are getting wrong right now? 0:04:37.040 --> 0:04:38.760 Well, it's a bit kind of arrogant to say that 0:04:38.800 --> 0:04:40.919 the market is wrong, because what is the market. The 0:04:40.960 --> 0:04:43.760 market is the total IQ of all the people in 0:04:43.800 --> 0:04:46.360 the world, right, So that's a tough one. 0:04:46.360 --> 0:04:46.640 I do. 0:04:46.800 --> 0:04:49.760 I do think that inflation will be tough to get done. 0:04:50.080 --> 0:04:54.720 There is more near shoring. We are seeing some well, 0:04:54.720 --> 0:04:58.320 we have recently seen some more pressure on raw materials. 0:04:59.760 --> 0:05:03.200 Way increases are quite high. 0:05:03.520 --> 0:05:05.960 So I suspect that we won't see the type of 0:05:05.960 --> 0:05:07.320 breakouts that many people expect. 0:05:07.480 --> 0:05:08.040 What do you see? 0:05:08.080 --> 0:05:10.800 I mean, there's this US exceptionalism, which is what we're 0:05:10.800 --> 0:05:13.320 seeing in the US economy, the inflation data, what the 0:05:13.360 --> 0:05:17.200 FED does. What have we gotten wrong on the US economy? 0:05:18.320 --> 0:05:21.840 Well, the US economy is actually pretty good, certainly relative 0:05:21.920 --> 0:05:24.920 to Europe, right and we see it as well when 0:05:25.000 --> 0:05:29.039 I have when I see US CEOs, they are just 0:05:29.279 --> 0:05:32.960 seeing the backjob for doing business in America is so 0:05:33.080 --> 0:05:39.040 much better than doing business in Europe. So a lot 0:05:39.040 --> 0:05:40.280 of things are going right in America. 0:05:40.400 --> 0:05:42.839 How much time do you spend looking at what the 0:05:42.880 --> 0:05:44.920 Fed does or what the economy does? And how much 0:05:44.920 --> 0:05:49.159 time do you spend understanding your companies and thinking about 0:05:49.200 --> 0:05:51.120 what themes you need to be invested in. 0:05:51.360 --> 0:05:53.559 No, I think they go They kind of go together. 0:05:53.640 --> 0:05:56.240 I think you understand the economy through the companies. So 0:05:56.360 --> 0:05:59.360 my job, in a way is to speak to companies 0:05:59.440 --> 0:06:03.080 and try to create this kind of mosaic of information. 0:06:03.279 --> 0:06:06.520 What do you see as the biggest change for our economies? 0:06:06.600 --> 0:06:09.760 Is it AI which is being priced in? Or is 0:06:09.760 --> 0:06:10.760 it geopolitics. 0:06:10.920 --> 0:06:14.599 I don't think you can differentiate AI from geopolitics anymore. 0:06:14.760 --> 0:06:21.080 They are so deeply intertwined because AI is now an 0:06:21.080 --> 0:06:28.320 important part of weapons, systems, of healthcare, research, of car technology, 0:06:28.400 --> 0:06:30.680 EV technology, So they just go together. 0:06:31.480 --> 0:06:34.640 So it's a new thing now. Micro chips is also. 0:06:34.440 --> 0:06:37.920 An important part of the geopolitics wasn't to the same 0:06:37.960 --> 0:06:40.720 extent before. So all these things are just much more 0:06:40.720 --> 0:06:41.800 complicated than they have been. 0:06:42.400 --> 0:06:46.040 You're tantalized right by this exciting change, when many people 0:06:46.120 --> 0:06:47.760 are actually really worried about what's coming. 0:06:48.440 --> 0:06:50.560 Well, I think the world has never been more has 0:06:50.600 --> 0:06:53.440 never been more exciting. Right, what's happening in AI is 0:06:54.240 --> 0:06:57.920 leading to some tremendous change, leading to some huge progress, 0:06:58.400 --> 0:07:02.159 for instance, in in the way we do research in 0:07:02.320 --> 0:07:05.200 an R and D, in the farmer industry. It's improving 0:07:05.400 --> 0:07:08.200 the you know, the weather forecast, It's improving a lot 0:07:08.240 --> 0:07:12.400 of things. Right, It's just a tremendous increase in compute power. 0:07:13.080 --> 0:07:15.080 So generally it's a positive thing. 0:07:15.640 --> 0:07:18.000 Are you mainly positive or do you also worry about 0:07:18.440 --> 0:07:19.200 you know, it's. 0:07:19.120 --> 0:07:21.480 Mainly I think it's mainly positive. And then the question, 0:07:21.520 --> 0:07:23.040 of course is how do you regulate this? I think 0:07:23.040 --> 0:07:25.560 it's going to be very tough to regulate because it's 0:07:25.600 --> 0:07:30.080 so embedded into kind of the competitive landscape between the superpowers. 0:07:30.240 --> 0:07:32.280 What's it mean for your investments in AI? You don't, 0:07:32.280 --> 0:07:34.000 of course, you don't choose one hundred percent? Will you 0:07:34.000 --> 0:07:37.920 invest because you have you know, a framework, but by 0:07:37.920 --> 0:07:40.120 the government. But how do you see the adoption of 0:07:40.160 --> 0:07:41.080 AI going forward? 0:07:42.400 --> 0:07:46.880 We are seeing the adoption we say fast adoption. 0:07:46.960 --> 0:07:50.280 And it's also interesting what are the applications for productivity? 0:07:50.440 --> 0:07:51.920 So on the podcast we have. 0:07:52.040 --> 0:07:54.440 I asked Samult, and you know, what kind of productivity 0:07:54.440 --> 0:07:56.840 growth should we see in our company over the next 0:07:56.840 --> 0:07:59.160 felve months, and he thought we should see twenty percent. 0:07:59.280 --> 0:08:00.120 Right, So I will. 0:08:00.080 --> 0:08:01.800 Around in the office and say, hey, how are you 0:08:01.840 --> 0:08:03.400 going to become twenty percent more efficient? 0:08:03.640 --> 0:08:06.640 What exactly are you doing? And I think we all 0:08:06.640 --> 0:08:08.360 need to ask ourselves about that. 0:08:08.440 --> 0:08:08.920 How are you? 0:08:09.000 --> 0:08:09.520 How are you doing? 0:08:09.880 --> 0:08:10.040 How? 0:08:10.080 --> 0:08:11.120 I was just asking you first? 0:08:11.400 --> 0:08:14.160 So for me maybe I can have multiple language. 0:08:13.800 --> 0:08:17.320 Skills exactly, which is something that actually you were mentioning. 0:08:17.360 --> 0:08:20.000 You have this podcast, which I know you enjoy doing. 0:08:20.920 --> 0:08:22.040 Why do you enjoy it so much? 0:08:23.280 --> 0:08:24.040 Oh? Why? I mean? 0:08:24.800 --> 0:08:26.680 So we started the podcast in order to give the 0:08:26.680 --> 0:08:30.600 Norwegian population insight into the type of companies they own, right, 0:08:30.880 --> 0:08:36.439 And it's basically we just learn a lot. We learn 0:08:36.480 --> 0:08:39.000 a lot which is relevant for students to listen to 0:08:39.000 --> 0:08:44.480 the podcast business leaders, we ourselves. It's important and you 0:08:44.480 --> 0:08:47.360 have the ability to talk to the people who actually 0:08:47.840 --> 0:08:48.680 kind of leave the world. 0:08:48.760 --> 0:08:49.800 It's fascinating, right. 0:08:50.160 --> 0:08:53.760 And also I need to read up on all these industries, 0:08:53.800 --> 0:08:55.240 so that's what I do during the weekends. 0:08:55.480 --> 0:08:56.600 Many of them have written books. 0:08:56.600 --> 0:08:59.400 I have to read the books, you know, you have 0:08:59.480 --> 0:09:02.120 to the insight into various industries. 0:09:02.720 --> 0:09:04.240 It's it's fantastic for learning. 0:09:04.720 --> 0:09:06.640 Who's the toughest interview you've done? Well? 0:09:06.640 --> 0:09:08.720 We had a pretty tough one with with Elon Musk 0:09:08.800 --> 0:09:11.240 because we had some technical issues, and of course that 0:09:11.880 --> 0:09:14.679 you need to kind of keep concentration whilst you have 0:09:14.720 --> 0:09:17.439 some technical issues. That's not so that's not so easy. 0:09:17.480 --> 0:09:19.200 But I think they're all they're all very good. I mean, 0:09:19.240 --> 0:09:24.200 these are great people and it's fascinating to talk to 0:09:24.240 --> 0:09:24.760 talk to them. 0:09:25.160 --> 0:09:27.080 You're a big investor in test, do you do you 0:09:27.080 --> 0:09:30.080 get into the nitty gritty of actually what a company does, 0:09:30.120 --> 0:09:33.680 what they're promising, to see whether your investment continues. 0:09:34.160 --> 0:09:35.960 Well, we don't. We don't really, I don't really do 0:09:36.040 --> 0:09:36.600 that kind. 0:09:36.480 --> 0:09:38.320 Of nitty gritty, like how many cars are you going 0:09:38.400 --> 0:09:39.719 to tell? How many of them are red, how many 0:09:39.720 --> 0:09:41.880 of them are blue? You know, all that kind of stuff. 0:09:41.920 --> 0:09:42.200 I don't. 0:09:42.320 --> 0:09:45.240 I just don't think that's necessarily important for the long 0:09:45.360 --> 0:09:48.280 term success of the company. But so why what where 0:09:48.320 --> 0:09:50.280 I spend time is on the business model to try 0:09:50.320 --> 0:09:53.280 to understand where where they make money and why they 0:09:53.280 --> 0:09:54.960 should continue to do well in the future. 0:09:55.080 --> 0:09:57.520 And a lot of time on corporate culture leadership. 0:09:58.080 --> 0:10:00.400 I think corporate culture is is completely underrat you know, 0:10:00.559 --> 0:10:04.760 it's just underestimated because you can have two companies which 0:10:04.840 --> 0:10:07.400 do exactly the same, or at least that's what looks 0:10:07.440 --> 0:10:08.120 like on the surface. 0:10:08.320 --> 0:10:10.439 One is hugely successful, one is a complete failure. What 0:10:10.800 --> 0:10:11.040 is it? 0:10:11.360 --> 0:10:15.320 You know, there is just something in the company and 0:10:15.320 --> 0:10:18.480 the way they conduct business which is so important. 0:10:19.320 --> 0:10:23.760 Coming up Nikolay Tangen on why the world has stumbled 0:10:23.800 --> 0:10:32.440 on the path to a greener future. The commitment of 0:10:32.480 --> 0:10:35.559 oil and gas companies is crucial to achieving net zero. 0:10:36.240 --> 0:10:39.440 The industry supplies more than half of the world's energy 0:10:39.720 --> 0:10:42.959 and is one of the planet's biggest polluters. Oil majors 0:10:43.000 --> 0:10:47.080 have vowed to cut production and slash emissions, but recently, 0:10:47.559 --> 0:10:51.360 after record breaking profits, some have walked back on those pledges, 0:10:51.720 --> 0:10:55.959 despite pressure from institutional investors like Norway Sovereign Wealth Fund. 0:10:56.360 --> 0:11:02.920 I continue the conversation with Nikolai Tangan. You've been one 0:11:02.920 --> 0:11:07.760 of the most committed to climate change and to ESG matters. 0:11:08.120 --> 0:11:10.280 Are we taking a backstep as a world? 0:11:10.520 --> 0:11:16.920 Yes, we have done unfortunately, very unfortunate, but yes, the 0:11:16.960 --> 0:11:20.600 world has taken a step back and I guess we 0:11:20.640 --> 0:11:24.160 are one of the few big investors out there now 0:11:24.200 --> 0:11:28.959 who continue to be consistent and who continued to talk 0:11:28.960 --> 0:11:31.760 about these things the way we have done all the time. 0:11:32.280 --> 0:11:34.760 But many people have kind of turned on the volume 0:11:34.800 --> 0:11:36.000 on that messaging. 0:11:36.240 --> 0:11:37.720 Why have we taken a step back? 0:11:39.640 --> 0:11:42.600 Well, I think on the back of higher energy prices, 0:11:42.800 --> 0:11:49.280 the energy sector got more confidence, there was more focus 0:11:49.400 --> 0:11:53.600 on energy security, and that's kind of what started it, right, 0:11:54.000 --> 0:11:56.280 And then you have had some political movements as well 0:11:56.320 --> 0:11:58.240 which have moved in the same direction. 0:11:58.440 --> 0:12:01.000 Nicolete, when you look on on some of your investments, 0:12:01.040 --> 0:12:04.160 how difficult is it to take a company, a big company, 0:12:04.240 --> 0:12:07.480 an oil major and change it from within as an investor, 0:12:07.679 --> 0:12:10.040 and therefore how difficult is it to decide to stay 0:12:10.040 --> 0:12:11.120 invested in that company? 0:12:11.160 --> 0:12:13.520 Well, it's an important question because you can do two things. 0:12:13.720 --> 0:12:15.880 If a company doesn't quite do what you think they 0:12:15.920 --> 0:12:19.160 should be doing, you can sell it, or you can 0:12:19.440 --> 0:12:21.800 continue to have a dialogue with them and try to 0:12:21.960 --> 0:12:23.160 get them to change tech. 0:12:23.240 --> 0:12:25.000 Right now, what do you achieve if you sell it? 0:12:25.480 --> 0:12:27.400 You basically end up with a company which is owned 0:12:27.400 --> 0:12:30.520 by investors who don't care. That doesn't make a lot 0:12:30.559 --> 0:12:32.760 of sense. So therefore, we continue to have a dialogue 0:12:32.800 --> 0:12:37.000 with these company's, show understanding and remain invested whilst they 0:12:37.000 --> 0:12:38.240 are in that transition period. 0:12:38.480 --> 0:12:40.800 Where do you feel you've made a difference and where 0:12:40.840 --> 0:12:41.880 have you been disappointed? 0:12:42.440 --> 0:12:45.040 I think we made a difference many places. Now I 0:12:45.040 --> 0:12:47.880 wouldn't say we have revolutionized the oil and gas industry, 0:12:47.880 --> 0:12:52.000 but we have been been supportive and helpful in many cases. 0:12:52.000 --> 0:12:54.000 And that's also what we hear back from the companies. 0:12:54.800 --> 0:12:56.960 When you look at I think you have a commitment 0:12:57.120 --> 0:12:59.600 to make all your portfolio and at zero by twenty fifty. 0:13:00.400 --> 0:13:03.280 Is that achievable? Certainly a goal we have. 0:13:04.600 --> 0:13:09.280 Why are you so committed to climate change in twenty twenty. 0:13:09.000 --> 0:13:14.160 Four because there are There are two things which is important. 0:13:14.400 --> 0:13:19.920 One is to not let small problems become big. But 0:13:19.960 --> 0:13:23.360 it's also important not to let big problems become small. Now, 0:13:23.400 --> 0:13:26.000 the climate situation we're in, it's clearly a very, very 0:13:26.080 --> 0:13:30.640 big problem. We had the hottest year on record last year. 0:13:31.000 --> 0:13:33.480 It started to have impact in many, many different ways. 0:13:33.559 --> 0:13:35.800 You see it in the reinsurance prices, you see it 0:13:35.840 --> 0:13:40.040 in a lot of you know, worse harvests. It's leading 0:13:40.200 --> 0:13:44.440 in some cases to increase immigration immigration, so it's impacting 0:13:44.480 --> 0:13:47.640 the world in very many different ways. Now, at the 0:13:47.720 --> 0:13:49.840 end of the day, this is actually a financial risk 0:13:50.679 --> 0:13:52.679 because it's a risk to the value of the fund. 0:13:53.360 --> 0:13:56.240 And if you're invested across the world and one company pollutes, 0:13:56.600 --> 0:13:58.880 you can't hide it, right because you capture that pollution 0:13:59.000 --> 0:14:01.160 in all the other mean as your own. So it's 0:14:01.240 --> 0:14:03.640 very very important that the main shareholder is engaged in this. 0:14:03.880 --> 0:14:06.959 Do you worry that actually, you know, investors don't engage 0:14:06.960 --> 0:14:08.680 with some of these companies. And I know you also 0:14:08.679 --> 0:14:12.839 have an ethics basically committee, the ethics Council whether you 0:14:12.960 --> 0:14:15.760 can invest, which is independent but gives you advice or 0:14:15.800 --> 0:14:19.280 actually forces you to either sell investments or not invest 0:14:19.320 --> 0:14:22.680 in companies that are not ethical. How does that relationship work? 0:14:23.120 --> 0:14:25.960 No, it works really well. So this is a separate 0:14:25.960 --> 0:14:29.840 counsel of ethics. They have various criteria they look at 0:14:30.440 --> 0:14:35.320 for instance, human the human rights criteria, the cold criteria, 0:14:35.960 --> 0:14:39.520 Uklear weapon criteria, and then they would go into deep 0:14:39.520 --> 0:14:42.120 research with various companies to see what do they whether 0:14:42.160 --> 0:14:43.960 they breach their criteria and if they do, they would 0:14:44.000 --> 0:14:45.520 advise us to exit. 0:14:45.920 --> 0:14:48.880 And has that happened? Yeah, sure on climate change. 0:14:49.000 --> 0:14:53.920 On climate change, we do exclude some companies over selves, 0:14:55.280 --> 0:14:57.400 and it can be various parts of that they can be. 0:14:58.480 --> 0:15:03.600 That could be, for instance, people use water resources and 0:15:03.640 --> 0:15:03.960 so on. 0:15:04.360 --> 0:15:06.440 I think you're also invested in like physical assets like 0:15:07.360 --> 0:15:11.400 not went sure, but renewables. What makes more sense for 0:15:11.440 --> 0:15:14.840 an investor like yourselves being a shareholder actually. 0:15:14.640 --> 0:15:17.400 Owning the parks. I think you can do both. 0:15:17.440 --> 0:15:18.640 You know, we do both. 0:15:18.720 --> 0:15:22.000 We own some of the companies who are involved in 0:15:22.080 --> 0:15:25.680 these projects, but we also own particular projections, not that 0:15:25.760 --> 0:15:28.520 many because it recently came into our mandate, so we 0:15:28.600 --> 0:15:31.120 have we've done it. And then also in the beginning 0:15:31.640 --> 0:15:34.120 the returns weren't that's attractive. We think the returns are 0:15:34.160 --> 0:15:36.280 better now and so we have accelerated that activity. 0:15:36.360 --> 0:15:39.320 And this is better returns better in Europe because there's 0:15:39.360 --> 0:15:43.480 more regulation to push towards green energy or actually does 0:15:43.480 --> 0:15:46.960 the Inflation Production Act means that there's going to be 0:15:47.000 --> 0:15:49.840 more on shore and more appeal for green technology in 0:15:49.840 --> 0:15:50.080 the UN. 0:15:50.200 --> 0:15:53.000 I think what we've seen is that the Inflation Reduction 0:15:53.040 --> 0:15:55.880 Act has made the many of the investments in the 0:15:56.000 --> 0:15:59.640 US more attractive than what the score is in Europe. 0:16:00.280 --> 0:16:03.880 Yeah, and will that change with the mean China is 0:16:03.880 --> 0:16:05.640 also doing a lot of evs. So when you look 0:16:05.680 --> 0:16:09.560 at all of all of this competition across the energy sectors, 0:16:09.600 --> 0:16:11.200 where do you think you will be invested in five 0:16:11.280 --> 0:16:12.000 six years from now? 0:16:12.200 --> 0:16:13.680 Well, it's difficult to say. 0:16:13.680 --> 0:16:17.080 And also we don't know whether the inflation reduction will 0:16:17.200 --> 0:16:19.000 remain or whether it's going to be renewed, or whether 0:16:19.040 --> 0:16:21.080 it's going to be you know, changed, So I don't 0:16:21.080 --> 0:16:23.320 I don't think. I don't think we really know that. 0:16:23.600 --> 0:16:25.800 But for the time being in the US looks looks 0:16:25.800 --> 0:16:28.760 pretty good. How do you see the US political cycle 0:16:29.320 --> 0:16:30.280 and the rest. 0:16:30.640 --> 0:16:32.440 So we have no view on that. 0:16:33.120 --> 0:16:36.240 We are a very long term investor and we remain 0:16:36.320 --> 0:16:39.000 invested throughout political cycles. 0:16:39.200 --> 0:16:41.240 But does this year, I think four and a half 0:16:41.320 --> 0:16:44.600 billion people go to vote, does that test AI or 0:16:44.600 --> 0:16:46.359 does that test your investment strategy? 0:16:46.680 --> 0:16:48.920 I don't think you test our investment strategy because we 0:16:48.960 --> 0:16:51.920 generally are invested over these type of cycles. I don't 0:16:51.960 --> 0:16:54.600 think you can kind of change your portfolio according to 0:16:55.080 --> 0:16:58.760 where the election is. And also markets are pretty sophisticated, right, 0:16:58.800 --> 0:17:03.440 so they are their account they are basically discounting, you know, 0:17:03.680 --> 0:17:08.399 the current probability of the various elections we are seeing. 0:17:09.320 --> 0:17:13.160 It is questioning the use of AI in social media, 0:17:13.480 --> 0:17:15.520 for sure, we are seeing that in many places. 0:17:16.400 --> 0:17:18.879 Does it matter to you know, to you being the 0:17:18.960 --> 0:17:21.480 largest sovereign wealth fund in the world, does it gives 0:17:21.480 --> 0:17:25.399 you more access, for example, and political cloud to invest 0:17:25.440 --> 0:17:26.200 in places? 0:17:26.320 --> 0:17:27.840 No, we would not have political cloud. 0:17:28.119 --> 0:17:32.160 It's very important that the fund remains not political and 0:17:32.200 --> 0:17:35.520 so we are very very careful staring that balance. 0:17:35.800 --> 0:17:38.280 But do you see it as a force for good? 0:17:38.880 --> 0:17:40.920 I wouldn't say the fund is a force for good, 0:17:41.000 --> 0:17:45.000 but we are trying to care about the important things 0:17:45.320 --> 0:17:47.000 when it comes to future returns for the fund. 0:17:47.960 --> 0:17:51.919 Coming up, Nikolay Tangen on his love for learning and 0:17:52.000 --> 0:18:00.240 why combining knowledge is key to innovation. Nikolai tang Again 0:18:00.280 --> 0:18:03.040 has been in charge of Norway's sovereign wealth fund since 0:18:03.080 --> 0:18:07.280 twenty twenty, but the former hedge fund manager turned podcast 0:18:07.320 --> 0:18:11.600 host and philanthropist has other passions. Tangan owns the biggest 0:18:11.600 --> 0:18:14.480 private collection of Nordic Modernist. 0:18:14.119 --> 0:18:15.679 Art and even took. 0:18:15.560 --> 0:18:19.440 A career break to study art history. I continue the conversation. 0:18:23.480 --> 0:18:25.760 You love also going back to school and you know, 0:18:26.000 --> 0:18:28.080 learning about leadership, what drives you. 0:18:28.400 --> 0:18:30.920 I just love learning, right, I think we just need 0:18:30.960 --> 0:18:36.000 to learn otherwise, what's the point. So you'd go back 0:18:36.040 --> 0:18:38.720 to school. I've been back to school a few times. 0:18:38.720 --> 0:18:41.040 I did a degree when I was thirty six in 0:18:41.119 --> 0:18:43.879 art history. I did one in social psychology when I 0:18:43.960 --> 0:18:46.280 was you know, fifty. 0:18:46.920 --> 0:18:48.520 I'd love to go back to school. What would you 0:18:48.520 --> 0:18:49.120 study this time? 0:18:50.960 --> 0:18:54.080 So many cool things. I think anthropology will be quite fun. 0:18:54.840 --> 0:19:00.280 We're fun to study music looked so many things worry 0:19:00.280 --> 0:19:03.800 about though. I mean, you seem very optimistic by nature. 0:19:04.480 --> 0:19:07.240 You love your job, but it also feels like the 0:19:07.280 --> 0:19:10.840 world is being tested. What do people need to study 0:19:10.880 --> 0:19:14.159 today to make sure that whatever comes our way, we 0:19:14.280 --> 0:19:17.080 take the right decision. I think the more, in my mind, 0:19:17.119 --> 0:19:19.080 the more different type of things you know, the better 0:19:19.119 --> 0:19:19.520 it is. 0:19:19.840 --> 0:19:22.000 I personally value. 0:19:22.240 --> 0:19:24.840 I'd rather have several miles degrees than want pH D, 0:19:24.960 --> 0:19:28.160