Norway’s sovereign wealth fund, also known as the Government Pension Fund Global (GPFG), reported a record loss of 1.64 trillion Norwegian kroner ($164 billion) for the year 2022, citing “very unusual” market conditions. However, the fund still remains the world’s largest, with assets worth over $1.3 trillion.
The impact of war, inflation and interest rates
The fund, which invests Norway’s oil and gas revenues in global stocks, bonds and real estate, suffered a negative return of -14.1% last year, which was 0.88 percentage points better than the return on its benchmark index. The fund attributed the loss to the war in Europe, high inflation and rising interest rates, which negatively affected both the equity and bond markets at the same time.
“All the sectors in the equity market had negative returns, with the exception of energy,” said Nicolai Tangen, the fund’s CEO, in a statement. “The market was impacted by war in Europe, high inflation, and rising interest rates. This negatively impacted both the equity market and bond market at the same time, which is very unusual.”
The fund’s previous largest loss was 633 billion kroner in 2008 amid the global financial crisis.

The fund’s net-zero target and climate action plan
Despite the dismal performance in 2022, the fund has set ambitious goals for the future, aiming to have every company in its portfolio reach net-zero greenhouse gas emissions by 2050. The fund has also announced a climate action plan that aims to align its investments with the Paris Agreement, a global commitment to combat the climate crisis.
“Our goal is to be the world’s leading investor in terms of how climate risk is managed,” Tangen said. “Our long-term return will depend on how the companies in our portfolio manage the transition to a zero emissions society.”
The fund will engage with the companies in which it invests to set credible interim targets and plans to reduce their direct and indirect emissions of greenhouse gases. The fund will also increase its investments in renewable energy and green technologies, as well as divest from companies that are not compatible with its climate goals.
The fund’s role and responsibility as a global investor
The fund was established in the 1990s to invest the surplus revenues of Norway’s oil and gas sector, which are expected to decline in the coming years due to lower demand and prices. The fund’s main objective is to safeguard and grow the wealth of future generations of Norwegians, as well as contribute to global development and stability.
The fund holds stakes in more than 9,300 companies in 70 countries around the world, representing nearly 1.5% of all shares within listed companies globally. The fund also owns properties in major cities such as London, Paris, New York and Tokyo.
The fund follows ethical guidelines that prohibit it from investing in companies that produce weapons of mass destruction, violate human rights, cause severe environmental damage or engage in corruption. The fund also exercises its voting rights and engages with companies on issues such as governance, sustainability and diversity.
The fund’s size and influence have also prompted an impassioned debate about international justice and solidarity, especially amid Norway’s skyrocketing fossil fuel revenues due to the war in Ukraine. Some opposition lawmakers, prominent economists and energy industry leaders have called on the government to set an example to the world by pumping its bumper petroleum profits into a new international solidarity fund that would support humanitarian and development efforts in conflict-affected regions.
Norway’s Foreign Ministry has said it is fully aware of the responsibility that comes with its energy resources and that it is committed to supporting peace and security in Europe and beyond.