Last week, one of the largest planned divestments of fossil fuel assets in history was announced.

The Norwegian government publicly declared its intention to sell off ownership in oil and gas companies, to the tune of 66bn Norwegian krone (£5.7bn).

This massive decision sent ripples through the markets, and the international benchmark Brent Crude was down 1.7 per cent as a result.

But for a Norwegian like myself, this news was both expected and overdue.

Sovereign state

While sovereign wealth funds are something of an alien concept in Britain, they represent several of the largest investment bodies on Earth.

China, the United Arab Emirates, Kuwait, and Saudi Arabia all boast some large state-owned investment funds. But none compare to the scale of Norway’s. Valued at over $1 trillion, the Norwegian fund owns almost 1.5 per cent of every publicly listed company in the world (as well as nearly 20 per cent of London’s Regent Street).

Other than its size, what makes the Norwegian fund special are its democratic roots: it answers to politicians who are elected by the Norwegian people. By a simple calculation of value distribution, that’s around £200,000 per Norwegian citizen.

The Norwegian fund also plans long-term. When the global financial crisis hit in 2008, most investors scaled down and waited for the dust to settle.

But what did the Norwegians do? They kept investing while prices decreased – and 10 years later, this risk has paid off handsomely.

Fuel to the fire

Traditionally, the Norwegian sovereign wealth fund has been neutral in its operations. This begs the question: why this sudden change of tone?

There are several reasons behind the move to get out of fossil fuels. For one, the fund is a reflection of Norwegian culture and society. Climate change is an extremely important issue in Norway, and has been for some years.

There is, of course, the irony of a country that grew rich from oil now becoming an important voice on global warming. But we now also practice what we preach.

An impressive 97 per cent of energy in Norway comes from renewable resources. And the electric car has seen a meteoric rise; in February this year, 40 per cent of all new cars sold in the country were zero-emission vehicles.

Oslo was the EU Commission’s pick for 2019’s green capital of Europe, and the city is on track to be car-free

imminently.

That is the ethical reasoning behind last week’s announcement. But there is, of course, a pragmatic reason too, which revolves around the price of oil.

Norway had a serious problem when the oil price dropped to one third of its value back in 2015.

Though it has since bounced back, the period taught my country an important lesson: never again should our economy be so dependent on oil, and never again will so many people lose their jobs because of the resource’s prices.

Oslo after oil

But what will happen next? Where will this incredibly rich and powerful government-run fund turn its gaze?

The answer to that is technology.

When I started my tech company back in 2014, the Norwegian startup scene was virtually non-existent. The focus had always been on oil, gas, and fish. So I started my business in San Francisco instead.

But a magnetic pull lured me home.

Oslo has germinated into a powerful tech hub, and according to data analysis website The Nordic Web, year-on-year investment in tech increased 70 per cent from 2017 to 2018.

There was a time when talented school-leavers would go straight into the oil and gas sectors. Now it’s startups that are hoovering up the majority of bright young people.

For aspiring tech workers, the sovereign wealth fund’s announcement will be welcome news, partly because it means that more money will flood into their sector, but also because the decision mirrors their own ideology.

Norwegian startups tend to have one thing in common: a strong moral compass, focusing on ethics, values, and sustainability.

Norway’s renewable innovations, and well-funded education system mean that young people grow up environmentally conscious and with a strong impulse to “do right”.

The long-term vision of the Norwegian sovereign wealth fund has been proven correct on many occasions. This financial track-record, combined with the environmental benefits of divesting away from oil, make a compelling case for why the rest of the world should follow suit.