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Norway’s $1.2 Trillion Investment Fund Sets 2050 Net Zero Target – The New York Times

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The huge government fund that invests Norway’s oil revenue said on Tuesday that it was going to step up its efforts to persuade companies to slash their carbon dioxide emissions by 2050.

It’s the first time that the $1.2 trillion fund has set a date by which companies it invests in should be at “net zero,” meaning they either emit no carbon or offset their emissions by removing equivalent amounts of carbon from the atmosphere. The 2050 target aligns the fund, which has stakes in over 9,000 companies around the world, with BlackRock and many other large asset managers.

To limit the warming of the atmosphere to no more than 1.5 degrees Celsius, or 2.7 degrees Fahrenheit, compared with preindustrial levels — the main goal of the Paris climate agreement — scientists calculate that emissions have to reach net zero by 2050.

“If you don’t have proper climate ambitions, you don’t have a business,” Nicolai Tangen, chief executive of Norway’s fund, said in an interview before the release of its climate strategy. “With the way things work now, you will not get loans from the bank, you won’t have coverage on the insurance side, you won’t have any clients and you won’t have any people working for you.”

Norway’s fund, like other big investors, is calling on companies to come up with credible plans to reduce their emissions. Many large companies have set net-zero plans, but sometimes they lack detail and ambition. In such cases, funds often press management teams and boards to do more. On Tuesday, Norway’s fund said it would sell companies it deemed to be laggards, saying that it would “divest from companies with unmitigated climate risks, especially where engagement has failed or is unlikely to succeed.”

Norway’s fund is adding pressure even as investors face challenges to their climate activism.

Over the past year, soaring oil and natural gas prices have revived the profits and stock prices of energy companies, underscoring that extracting fossil fuels can still be a winning business financially. In addition, shortages of oil and gas, the result largely of Russia’s actions and the war in Ukraine, have led to calls for energy companies to produce more, not less.

And climate initiatives by large asset managers also face growing political opposition from Republicans, who say big investment firms are using their heft to press for progressive policies.

“From Wall Street banks to massive asset managers and big tech companies, we have seen the corporate elite use their economic power to impose policies on the country that they could not achieve at the ballot box,” Gov. Ron DeSantis, Republican of Florida, said this summer.

Still, large investment funds may decide to keep their stakes in the companies that emit the most carbon for many years. As shareholders, they can push for more ambitious climate plans and help bring about the biggest reductions in emissions. Large oil companies in theory also have enough money to invest in technologies that can help slash emissions, like the currently very expensive attempts to suck carbon out of the air.

“The big integrated energy companies are really the solution here,” Mr. Tangen said.

Norway’s fund intends to continue to increase its investments in renewable energy companies and projects. But Mr. Tangen said the fund was struggling to find attractive investments in this field.

“The competition is extremely high,” he said. “So the returns you make are very, very low.”

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How rising interest rates impact insurers' investment decisions – Canadian Underwriter

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Recent interest rate hikes aimed at curbing inflation, and the potential for more rate hikes next year, has the insurance industry keeping an eye on its investment returns.

But while the transition from a low-interest-rate environment to a higher-rate environment will create short-term challenges, it also creates a long-term opportunity, noted Gord Dowhan, CFO at Wawanesa Insurance in a recent Canadian Underwriter interview.

“Over time…higher interest rates can create an opportunity for us to increase our yield moving forward,” Dowhan said. “As bonds mature, it gives us the opportunity to invest at a higher rate.

“You’ve seen this experience in Europe and elsewhere, where they were at zero percent and negative interest-rate environments in some cases. Having higher rates is healthier than being in that environment [of extremely low or negative interest rates], and there’s definitely an opportunity for us to pick up yield and investment returns within our investment portfolio as those instruments mature.”

For an insurer’s portfolio, Dowhan noted a rising interest rate environment makes certain investment instruments more attractive. And his firm has some of these in place, including preferred shares, limited recourse capital notes, and floating-rate or variable-rate debt.

“We’re also looking at real estate and infrastructure investments. From a rate-reset, preferred-share perspective, this gives us the opportunity to increase our yield; the dividend yield resets regularly based on five-year government bond yields,” he said.

“In a rising rate environment, this gives us an opportunity to increase our returns. Floating-rate, or variable-rate, debt has become increasingly attractive as rates rise. We’ve invested in and will continue to invest in floating-rate debt and look for opportunities to grow our portfolio there.”

What’s more, Dowhan said that during high inflationary periods, real estate and infrastructure tend to outperform other asset classes.

“The underlying instruments within these products, leases and other revenues that produce revenue streams linked to inflation, is one reason why they typically outperform other asset classes during periods of high inflation,” he told CU. “So, opportunities exist for us to enhance our yield in the long term and continue to deliver value for our policyholders.”

This article is excepted from one that appeared in the August-September issue of Canadian Underwriter. Feature image by iStock.com/porcorex

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Landa Sees More Growth, EPac Gets New Investment And More | Label and Narrow Web – Label & Narrow Web Magazine

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Demonstrating its commitment to supporting its growing customer base and interest from future customers, Landa Digital Printing is aggressively expanding its global team and business development infrastructure with the appointment of several new sales professionals.

New Landa appointments include:

  • Bill Lawver, Inside Sales Representative
  • Michael Weyermann, Regional Sales Manager – Northeast
  • Steve Smith, Regional Sales Manager – Southeast
  • Danny Green, Regional Sales Manager – Mideast
  • Michelle Weir, Regional Sales Manager, Southwest

Sharon Cohen, chief business officer, Landa Digital Printing, comments, “We are delighted to have secured the talent and experience of Bill, Michael, Steve, Danny and Michelle. Their highly relevant backgrounds will be instrumental in supporting our growth plans across North America, while also supporting the wider team to ensure continued high customer satisfaction, innovation and success.

Meanwhile, Amcor has announced a further strategic investment of up to $45 million in ePac Flexible Packaging. The investment will increase Amcor’s minority shareholding in ePac Holdings LLC.

Amcor’s executive vice president of strategy and development, Ian Wilson, comments, “This additional investment reflects our confidence in ePac’s entrepreneurial team and their proven ability to rapidly scale in the high growth, often higher value short run segment. Since our initial investment last year, we have been deeply impressed with ePac’s focused and innovative business model centered around deploying a very high level of digitalization and customization. ePac’s proven digital technologies enable the delivery of exceptional service levels and significantly reduced lead times. These specializations are designed to meet the unique speed to market and service needs of locally based small to medium customers, skill sets that are highly transferable to areas of Amcor’s core business.

Here are the highest-trafficked news items for the week ending on September 23:

1. Landa announces five senior additions to NA sales team
2. Amcor expands investment in ePac Flexible Packaging
3. FLAG enjoys productive Labelexpo Americas
4. Mondi invests in new research and development center in Germany
5. S-OneLP recognized as Global Label Award winner

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Britain outlines tax incentives for new investment zones – Reuters UK

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LONDON, Sept 23 (Reuters) – British finance minister Kwasi Kwarteng outlined what he called an “unprecedented set of tax incentives” for businesses in newly-announced investment zones, saying the government would also liberalise planning rules for specified agreed sites.

The government said there were potential investment zones in England so far but it would work with the devolved administrations in Scotland, Wales and Northern Ireland to deliver them around the United Kingdom.

“On purchases of land and buildings for commercial or new residential development, there will be no stamp duty to pay whatsoever,” Kwarteng told lawmakers in a fiscal statement on Friday.

“On newly-occupied business premises, there will be no business rates to pay whatsoever. And if a business hires a new employee in the tax site, then on the first 50,000 pounds ($55,800) they earn, the employer will pay no National Insurance whatsoever.”

The government said more detail on how a liberalised planning offer in the zones would work in due course.

Areas interested in becoming investment zones include Liverpool and Greater Manchester in northwest England, Somerset and Plymouth in the southwest, Sunderland and the Tees Valley in the northeast and Southampton and Essex in the south and east.

The government also said infrastructure projects would be accelerated, aiming to get as many as possible under construction by the start of 2023.

The list of projects to be accelerated included nuclear energy sites Hinkley Point C and Sizewell C, oil fields search as Cambo Phase 1, and several train lines, stations and roads.
($1 = 0.8961 pounds)

Reporting by David Milliken and Alistair Smout, editing by Elizabeth Piper

Our Standards: The Thomson Reuters Trust Principles.

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