In what analysts are calling the most consequential capital reallocation since the post-war industrial boom, sovereign wealth funds controlling over $40 trillion in assets are simultaneously pivoting away from fossil fuel investments and toward renewable energy, climate technology, and sustainable infrastructure.
The shift, detailed in a comprehensive analysis by the International Forum of Sovereign Wealth Funds, represents not merely a change in investment philosophy but a structural transformation of global capital markets. When funds of this scale change direction, they don't follow markets — they make them.
The Norway Model Goes Global
Norway's Government Pension Fund Global — the world's largest sovereign wealth fund at $1.6 trillion — pioneered this approach, divesting from fossil fuel companies beginning in 2019. Its renewables portfolio, valued at $89 billion, has outperformed its oil sector investments by an average of 14% annually since the pivot.