Norway's $2.2 trillion wealth fund deploys AI to screen companies for ESG risks and avoid losses

Norway's wealth fund using AI to screen for ESG risks

OSLO, Feb 26 (Reuters) - Norway's $2.2 trillion sovereign wealth fund, the world's largest, is using AI to screen companies for risks such as potential links to forced labour and corruption, and help avoid financial losses as a result, it said on Thursday. One of the world's largest investors, the fund holds stakes in around 7,200 companies globally, owning about 1.5% of all listed stocks. It has often set the pace on environmental, social and governance issues. The fund's investments are measured against a benchmark index set by the finance ministry, with equities tracked against the FTSE Global All Cap index. Each time that index includes new companies, the fund's operator, Norges Bank Investment Management (NBIM), must screen them before they enter the portfolio. Since 2025, NBIM has used large language models to screen all companies on the day they enter the equity portfolio, rapidly scanning for public information that data vendors typically do not provide. "Within 24 hours of our investment, the AI tools flag new companies in the fund's equity portfolio with potential links to, for example, forced labour, corruption or fraud," NBIM said in its annual responsible investment report, published on Thursday. "In multiple instances, we identified and sold these investments before the broader market reacted to the risks, avoiding potential losses." AI is especially useful for researching smaller companies in emerging markets, NBIM said, noting that data vendors often offer limited coverage and international media may not report on them. "News may be limited to small media outlets in local languages, and controversies suggesting systemic failures in risk management may go unreported in international media," it said. Reporting by Gwladys Fouche in Oslo. Editing by Mark Potter Our Standards: The Thomson Reuters Trust Principles., opens new tab

The world's biggest sovereign wealth fund is using Anthropic's Claude AI model to screen investments for ethical issues

Nicolai Tangen, CEO of Norges Bank Investment Management, addresses a press conference on his company's annual results for 2024 at Norges Bank in Oslo, Norway, on January 29, 2025. Norway's $2 trillion oil fund, one of the world's biggest investors, said Thursday that it is now using AI to screen investments for potential reputational and ethical risks. Norges Bank Investment Management (NBIM) manages the fund, which was set up in the 1990s to invest revenues from Norway's oil and gas industry. It's an investor in more than 7,200 companies across 60 countries and has stakes in around 1.5% of the world's publicly listed stocks. It's long been influential on the global market and ESG -- Environmental, Social, and Governance -- investing. It uses its influence and voting rights to set expectations for the companies and markets it invests in, including impact on people, the environment and society. In its annual responsible investment report, the fund's management team said it was now using AI to provide governance and sustainability insights to portfolio managers. The technology means it can expand the scope and scale of the information it analyzes, leading to "faster identification of material risks," NBIM said. A spokesperson for NBIM told CNBC that the organization's ESG risk monitoring team first began using Anthropic's Claude AI model in day-to-day work in Nov. 2024. Since then, they said, it has become "an important tool in our monitoring of ESG risk across the portfolio." In Thursday's report, NBIM said 2025 saw the deployment of large-language AI models to screen all companies on their first day of entering its equity portfolio. "These tools help us rapidly scan a wide range of public information that goes beyond what data vendors typically cover," the report said. "Where risks emerge around key themes, the LLM conducts deeper searches, providing contextual summaries."