Norway Mandates Columbia with Sustainability Study

The US university will consider how the mining sector could be hit by environmental changes.

The bank responsible for investing the world’s largest sovereign wealth fund (SWF) has asked Columbia University to examine how sustainability factors affect mining sector profitability.

The New York City-based institution was awarded a three-year grant by Norges Bank to chart the impact of environmental changes on copper and gold mining.

In a statement announcing the agreement, Norges Bank said that the mining sector had already seen “increased challenges” from water management, deforestation, land rights, social and regulatory issues.

The Bank added that departments within the university would “develop a modelling platform to quantitatively assess mining-related water and environmental risks and their financial implications”.

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The university will combine research gathered from the Columbia Water Center, the Earth Institute, the Department of Industrial Engineering and Operations Research and research from the Columbia Center on Sustainable Development.

Despite the vast majority of its assets being directly attributable to fossil fuels, the Norway Pension Fund Global is known for its sustainable and ethical investment standpoint.

Last year, the fund was advised by one of its advisory committees to reject calls to dump fossil fuel investments and concentrate instead on working with the worst offenders to make more of a positive impact.

Last month, the country’s Ministry of Finance said a new Council on Ethics would provide feedback to the fund’s advisory committee, beginning at the start of this year.

The bank said that the grant to Columbia “must be seen in context with the updated mandate for the fund given by the Ministry of Finance”.

This mandate requires Norges Bank to contribute to academic research on potential causality between sustainability-linked factors and financial risk and return in the long term.

“The data and models to be developed will be available to mining companies seeking to assess, manage and mitigate a broad range of environmentally induced financial risks,” the bank said.

“Other users include investors, mining companies, government regulators, non-governmental organizations, and academics.”

Related content: Norway SWF: Divesting ‘Ineffective’ Against Climate Change & Is it Time to Drop the ‘ES’ from ESG?

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