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
Norway’s $2.2T Wealth Fund Deploys AI to Spot ESG Risks in New Holdings
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.
NBIM’s AI-Driven ESG Screening
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.
Benchmark and Coverage
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.
How the AI Screening Works
Each time that index includes new companies, the fund's operator, Norges Bank Investment Management (NBIM), must screen them before they enter the portfolio.
LLMs adopted since 2025
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.
24-hour flagging window
"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.
Impact on Portfolio Decisions
"In multiple instances, we identified and sold these investments before the broader market reacted to the risks, avoiding potential losses."
Focus on Smaller, Emerging-Market Firms
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.
Local-language and Media Gaps
"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)
