german leaders say covid jabs could become mandatory from february and have announced tough restrictions on the unvaccinated. people who have not been inoculated against coronavirus are set to be banned from many public facilities, and non—essential shops. south africa says the omicron variant is driving a sharp increase in covid infections. over the last week, the daily number of new covid infections has increased fourfold, from less than 3,000 to more than 11,500. officials say vaccinations are now more vital that ever. the governing conservative party has retained the parliamentary seat of old bexley and sidcup, but the uk by—election victory for louie french has been secured with a greatly reduced majority. the poll was caused by the death from cancer of the former cabinet minister james brokenshire.
now on bbc news, it's hardtalk. welcome to hardtalk. i'm stephen sackur. if money is power, then one of the world's most powerful institutions is probably one you've never heard of. located in oslo and worth more than a trillion dollars, norway's sovereign wealth fund owes its existence to the country's vast reserves of oil and gas. it claims to be an ethical investor, so there was some consternation when it appointed my guest today, nicolai tangen, as its new boss. is a risk—taking, flamboyant hedge fund manager the right man to steer the world's biggest sovereign wealth fund?
nicolai tangen, welcome to hardtalk. thank you very much. you currently manage a sovereign wealth fund which is worth roughly $1.1; trillion — an unimaginable sum of money which is not your money — it is actually the people of norway's money. why should they trust you to manage it for them? well, in a way, you should ask the people that hired me. but i think the reason why i think i got thejob was because i have been running capital for 30 years. i've been in that business for a very long time and also seen some ups and downs, you know? i'm sure you have. running capital is sort of a jargon phrase, but in essence, you founded and ran
a hedge fund that was worth billions of dollars in its own right. but we associate hedge funds with risk—taking, with financial instruments. we don't necessarily associate it with the steady—as—she—goes notion of a sovereign wealth fund. yeah, i think it's more about having the right attitude towards risk. it's not necessary taking a lot of risks as being conscious about what risk is. so, during the time i ran ako capital, we were running with a lot lower risk than the actual market risk. when you were appointed, it stirred a storm of controversy inside norway, not least because you were seen as a candidate who hadn't officially been put before the norwegian public. there was a list of names in the shortlist, yours wasn't on it, and then, miraculously, it was announced that you get the job. why was it handled that way? well, in a way, you have to probably ask the central bank about exactly about how it was handled that way.
the reason why there was controversy was because it's a very importantjob and it's a job that all norwegians have a conscious kind of relationship to. so that one was thing. the other thing was, of course, i was a completely non—entity. nobody knew about me. not least because it was a principle of transparency, yet your name was never put forward on a list of candidates, and thatjust seemed very odd to norwegians. yes, it did. it also seemed odd that in the months before the competition to get the job, you had flown the elite of norwegian society, including parliamentarians, some government ministers, a whole lot of important people — to a special conference in the united states. private jets were supplied, sting provided the entertainment, it cost you personally millions of dollars. and then, lo and behold, you got the job a few months later. that was a little strange, wasn't it? it was strange. the thing was that the invitation — this was just a fantastic seminar that i put together and it had always
been my dream to put together a seminar where we discussed all kinds of things from social psychology to economics and music and all kinds of things that i'm interested in, art and so on, and it was planned for a couple of years in advance. the invitations went out 1.5 years before, so of course had nothing to do with thatjob. the unfortunate thing is... didn't it? the unfortunate thing for you then was knowing the job was becoming available when you flew these dignitaries to the united states? no, so the job discussion started afterwards. i should also say that one—third of the people in the seminar were norwegian and two—thirds were from the uk and elsewhere. there's another issue, and it's aboutjudgement. i think it's one that, if i may say so, probably still norwegians as themselves to this day. you seem to believe, after you got thejob, but before you were actually installed in the post, you seem to believe it was going to be acceptable for you to keep a substantial stake in your hedge fund company — a company that obviously
owns shares in a huge number of companies, millions of dollars�* worth of shares. you didn't see a conflict of interest there, but many norwegian politicians said that if that was the case, you would be a walking conflict of interest. couldn't you see that? it's very interesting because we made a structure which is equivalent to the type of structures you have in the uk. when politicians take a position, they put their assets into some kind of blind trust over which you have no control. that works in nearly all countries and we had expected that to work in norway too, and we thought it was a completely watertight type of structure, but it didn't work. so, therefore, we had to... but wasn't there an incident where, actually, the oilfund, the sovereign wealth fund had to stop a trade in rolls—royce shares because they were actually being sold by somebody representing your hedge fund? and you'd already been appointed to thejob. and it did look like a profound conflict of interest. but, again, did you not see it?
well, there was a particular case there which i didn't know about. i was then not part of the capital. it didn't look good, did it? well, you can always construe these type of relationships afterwards, but there was no correlation whatsoever. i suppose itjust comes back to the fundamentally important position you now have inside your own country, because every single norwegian has a stake in this fund you have a calculator that anybody can look at online where they can figure out what the fund is worth at any given time — as i say, roughly 1.4 trillion today — and then they can work out what their own individual notional stake is and for each norwegian in a country of 5 million, it's $700,000, so they really care that they can trust you. they really do, yes, absolutely. so, one final thought then on this and your suitability for thejob — it transpired that in your own personal life
and in your role as running the hedge fund, you hadn't taken advantage of the tax advantages that come in some tax havens — the cayman island and jersey were two that you used. you then have joined the sovereign wealth fund which is absolutely committed to ethical behaviour in all of the companies it invests in. do you regard tax avoidance is ethical behaviour? well, there was never any tax avoidance, and we used the same structure as most people who live in the uk do. i live in the uk. i don't bank in the cayman islands... in other words, a lot of people use trusts and i had a trust which was completely legal and was done according to all types of rules. it's not a question of whether it was legal. it's whether in the current climate of business and esg and the responsibility and sustainability agenda, many people around the world think tax avoidance — minimising the legal amount of tax you pay —
is not right when it leads you to put your money in places like the cayman islands and jersey. i'm asking you — you used to do that, do you think it's right today? when the capital was set up — ie, the hedge fund — that was how things were done. and the clients we had. large american universities, this is the way they wanted to be structured. that's the easiest way to avoid what they call a �*double taxation�*. and that's what we did. i always pay tax to the uk for all my earnings. during the whole pariod, i have been doing it. the important things for the sovereign wealth fund is that companies pay tax where the earnings are made, which it was also what i've done. it's also important that it's fully transparent in terms of what tax you pay tax, and so on, which i've also done. i've always been completely in compliance with the expectation that the sovereign wealth funds have to companies. it's just that you have made
a point — and the wealth fund, generally, actually, have made a point — that generally, it says it wants to be a much more active shareholder. because you hold investments — i think it's over 9,000 listed companies around the world — and your shareholdings run into many of these companies billions of dollars. in percentage terms, it might be anything from 1% to 3% or 4% of the company you own. therefore, you want now to have a voice on the way those companies run themselves. are you telling them that putting tax avoidance strategies together is not acceptable? we are telling them what i mentioned — that important things in terms of the expectations we have on tax and transparency, that, one, you want to pay tax where your earnings are generated. that's very, very important. but you didn't generate earnings injersey and the cayman islands, and yet, you used them for tax purposes. no, i generated the earnings in the ako fund in the uk, and that's also where i paid my full tax all the time. so, why did you have these vehicles that were registered from the cayman island
and injersey? because what i said was that, which i mentioned earlier, is that the clients of large endowments worldwide, that's where they wanted to be. let's take a bigger picture and look now at how you run the fund. the fund has massive stakes in oil and gas companies around the world, i think still to the tune of some $27 billion. now, post—glasgow, cop26 and the urgent need to decarbonise the world economy, are you sending a message that you will divest from oil and gas? no, we are not, and i'll tell you why — in 2019, the oil fund divested the pure upstream oil companies. now, that was not for ethical reasons, that was because we wanted to have diversification risk, because the nation is so dependent on oil
that it didn't make sense to have pure upstream companies on top. we have kept the integrated oil companies and we think that the way to solve this problem is to have an active dialogue with the companies and be part of this transition, the energy transition. we don't think — somebody needs to own these companies and we don't see any problems byjust selling out of the like of bp and shell and so on, where it gets much more valuable and much more powerful to be an active owner and to have a constructive dialogue with these companies. so, this notion that since 2004, yourfund was going to be "an ethical investor", it only seems to go so far. for example, i think you still have a big holding in exxon. now, we know from recent reporting in the united states that exxon stands accused by investigators — even by american politicians — of covering up research from within its own company about the impact of oil on man—made climate change over many years. you haven't even divested from exxon. well, we own stakes in 9,000 companies. i understand that.
yes, and we have a dialogue with these companies in a constructive manner where we solve... so, on what basis are you an ethical investor? well, we think we are a very ethical investor. we have very strong expectations to the companies we invest in along the lines of the climate side, we have four expectation documents, we have expectations when it comes to corruption, child labour, tax and transparency and so on. we think we have the most coherent set of expectations of any investor in the world. does it embarrass you that the total emissions of the companies in your fund far exceed the total emissions of your own country, norway, i think by double. that's embarrassing, isn't it? particularly for a country which tells the world it is absolutely a pioneer and at the forefront of greening its economy. well, when you own part of 9,000 companies, of course there is emissions coming from this. the carbon footprint of the portfolio has actually halved since 2013.
the important thing here is that we have very clear expectations to the company when it comes to how they should behave. we do expect that they have policies according to the paris agreement when it comes to net zero targets. it's notjust about the companies you invest in, it's about your own strategy. the government in norway wants you to commit to investing much more in renewables and renewable infrastructure. as far as i can see, you've been in post for over a year, you've only made one investment decision that meets that ambition — you've bought half a wind farm in the netherlands. but apart from that, other sovereign wealth funds, even oil—rich and gas—rich states like qatar, are doing much more to invest in renewables than you are in norway. first of all, there are many arguments here. first of all, we do have green mandates, we have energy—related mandates and we have 120 billion norwegian kroner
that we can invest in things like this, we already have investment in companies which solve these type of problems. crosstalk so, just to answer — you tell me i'm wrong. it's the only renewables investment i could see. absolutely. so, this was added to the mandate last year and we have already bought 50% of the second largest windmill farm in the world. it's — in terms of acreage, it's twice the size of manhattan. it provides equivalent energy to fuel1 million dutch households. now, there are — it's not like you can go out on regent street and buy a million windmills, you know? these are complex processes. it takes time. there's a lot of competition to get into these projects and i actually think we've done really well to get into this project and we are in several other processes. you think you've done very well. i think your problem is that the government in norway has changed. it's gone from centre right to centre left, it's a coalition led by the labour party
and the centre party. it's clear the labour party doesn't think that the sovereign wealth fund, that is you — and you say you are proud to call it an oilfund, by the way, which is perhaps significant in itself — but the labour politicians are saying you've got to do much more to show you're committed to getting to net zero emissions in your fund by 2050. so, are you going to do it? well, we are already have expectation documents that are saying that this is how we expect the companies to behave and what to we expect them to... you are not walking the walk yet. well, we are. last year, we had between 3,000 and 4,000 company meetings. and in most of those meetings, we would talk about climate and talk to companies about the expectations that they have. are you worried that a new government in oslo is going to be much tougher on you than the last one was? no, i'm not worried about that at all. what they are saying is we should do even more of what we are already doing. we've had climate discussions with companies since 2007. we were one of the first investors in the world who started this work. so, this isjust doing more
of the same and we just love the ambition of being one of the world leaders in terms of responsible investing. hmm. do you think there is a bigger problem — not so much about your sovereign fund, this is about norway generally that the country likes to position itself as extremely committed to a sustainable green agenda, while at the same time reserving the right to continue notjust to exploit the oil and gas reserves that's already opened up, but to explore new ones, including inside the arctic circle. i'm asking you this as a norwegian citizen as well as the boss of the sovereign wealth fund, do you think there is a fundamental hypocrisy there? no, i don't think so. when it comes to where we should produce oil and so on and the norwegian oil policy, that is decided by the government and by the politicians. i totally understand that. and myjob is to run the financial assets. so, it's not within my remit
to do that for that well. it doesn't matter to you because the government continues to put substantial finance into your fund and for the most years it puts new money into your fund, it is fair to say, most of that new money comes from oil and gas because that's the biggest earner that the government has. it matters to you whether norway remains committed to oil and gas exploration, which it does. absolutely. just one more point — the norwegian oil and gas is eager to be part of the energy solution here. in norway it is. no, on the continent. we are, as you know, supplying a lot of gas to this country, providing you with potential sources of where you get your gas from. so, we think that's important also going forward. post cop26, there are many independent observers as well as green groups who say that we will get nowhere near meeting the 1.5—degree ambition for the world unless we make a commitment to leaving vast reserves of oil and gas in the ground. do you agree?
well, again, that is something you should ask the norwegian politicians and it's not something i decide or have a view on. you don't have a view on it when we've just established that your relationship with the government is such that you get much of your new money from a government which gets that money from oil and gas? how come you don't have a view on it? it's absolutely vital to your future. myjob is actually quite straightforward and pretty simple. it's to look after the capital, safeguard it for future generations and try to increase it. in terms of where the money coming in is decided by the politicians and how we spend it is decided by politicians. so, i also have no view on how we spend that money — it's not myjob. put it this way — such as the strength of the fund — of what you call an oil fund, because its origins are in oil and gas — but now, much of your annual expansion comes from non—oil and gas revenues.
of course, because of the successful investment policy over many years. put it this way — norway could well now do without oil and gas, couldn't it? your fund prospers and your long—time future is so secure that you could walk away from oil and gas but you're not prepared to. i should ask your question — do you think it's a good idea that we stop providing gas to the uk? i'm not so sure... i think that's a fair question to ask. countries like the uk have to address it like norway has to address it, but norway seems to refuse to address it. it's been addressed by the politicians and the people in charge of the ministry of oil. their conclusion is full steam ahead, more exploration, even inside the arctic. that's what they have chosen to do now. that is not my task. let me ask you this, because you are one of the most wealthiest men in all of norway. you are known for your philanthropy, your love of art, you want to build a gallery in your home town which is going to cost millions and is the subject of some controversy. do you think that the wealth
norway has been good for your society? yes, i think it has been. and i think it has been for a couple of reasons. when we discovered oil in �*69, very early on we decided — or politicians at the time decided — that it should be wealth that should be spread over the whole population. it should belong to every norwegian person. they decided to put it into a fund, which they did, and i think it's been one of the most amazing stories of that country. it's politically anchored, it had broad political consensus how they should be treated and invested and spent. so, i think it's been really nice for the country. so, that's one thing — how we safeguard for future generations. it's also a reserve fund and you have seen it help norway through the pandemic. yet, we think of scandinavia and societies committed to equality and yet,
inequality on norway seems to be rising. i see now 1% of the richest 1% in your country own 21% of the wealth. that seems non—scandinavian, in a way. do you worry, as one of the richest, about that rising inequality? there are a couple questions there. first of all, it has nothing to do with myjob, which is not about how money should be spent within the country, 0k? crosstalk. you speak as one of the richest norwegians. when it comes to me as a person, me as a person i have decided to give away most of my wealth, i signed a giving pledge. so, giving away more than half of my wealth. and to take this job, i also put my stake in the hedge fund into a foundation which is giving away the money. so, i have made my personal choice. of course, that's up to every individual person. it is, and your choices
are fascinating. one final thought — a philosophical one. you, not so long ago, said in public that you believe that it was right to consider a 100% inheritance tax. that you didn't want your children to inherit your vast wealth. yes, i did say that. why did you say that? is it because after your long experience with money, you think money can be corrosive, particularly to those who inherit it? one of the most important things in life is to put forward and think out what are your dreams and what are your aspirations? and then, it is to work towards those dreams and aspirations. that is what makes life fascinating and worth living. and i think by giving young people a lot of money, you are taking away the whole purpose and that is why i have that view. i also think that when you look about the — how unfair the world is and how early it starts, it starts day one,
when you're born. it starts with the stimulation you get at home from your parents, the type of words you learn, childhood obesity, schools, getting a summerjob, help — getting help for your university applications. the whole thing just accelerates and starts so early. and i think to put a lot of money on top of that unfairness, i don't think it's great. and that is why i have that view, and i still have it — stronger than ever. nicolai tangen, it has been a pleasure having you on hardtalk. thank you very much indeed. thank you. good morning. this week, it's been quite a fickle weather story to tell, undulating from cold and crisp back to milder
and sometimes wet. and that's the story we've got first thing this friday morning. milderfor all of us, but by the time head towards the weekend, once again, we turn back into that cold bright story with some showers turning increasingly wintry on the hills. but for the here and now, we have got these weather fronts pushing in from the atlantic. they bump into colder air, so for a time, we will see a wintry mix. however, behind it, you can see this pizza—shaped triangle of yellow colour — that's the milder air tucking in behind those weather fronts. so, an early wintry mix of rain, sleet and snow to clear from the southeast corner, but then a legacy of cloud behind much of england, wales and northern ireland, perhaps northeast england and much of scotland are bright with some sunshine before scattered showers arrive during the afternoon. generally, a milder story. widely, we'll see temperatures into double figures, but by the end of the
afternoon, something a little heavier into south wales running along the channel coast will continue to drift its way eastwards during the early parts of friday evening. then into saturday, the wind direction changes to a northwesterly, driving in a rash of showers behind which have the risk of turning increasingly wintry once again into the far north of scotland. so, it's going to be a chilly start to saturday. and we see this area of low pressure dominating with the wind direction swinging around to a northwesterly once again. the wind direction will make a difference with the feel of the weather. we're going to lose that milder air and the blue colours are set to return as we head into the weekend. once again, noticeably colder for all. so, we start off on saturday with some early showery rain once again easing from the southeast, and then a case of sunny spells and scattered showers. some showers will be of sleet and snow, perhaps even for some at lower levels as temperatures sit around 4—5 degrees. further south of that with a little more sunshine, perhaps not quite as cold —
this is bbc news with the latest headlines for viewers in the uk and around the world. i'm victoria fritz. the who warns of a global covid surge, as 0micron cases are confirmed in 24 countries, and germany says jabs could become mandatory from february. applause and cheering the conservative party retains the parliamentary seat of old bexley and sidcup but with a greatly reduced majority. the american actor, alec baldwin, says he doesn't feel guilty over the fatal shooting on his latest film as he doesn't feel responsible. i feel that someone is