Norway's sovereign wealth fund, the world's largest, announced on Tuesday that it will require the approximately 9,000 companies in which it has invested globally to achieve zero net carbon emissions by 2050.

"We set a target of net zero emissions by 2050 at the latest for all companies," Carine Smith Ihenacho, the fund's chief governance and compliance officer, said while announcing the fund's new climate action plan.

"We will engage with the companies to reach this target by setting credible preliminary targets and creating plans to reduce their direct and indirect emissions of greenhouse gases," she added.

As per the IPCC, the UN climate expert panel, achieving carbon neutrality by 2050 is required to limit global warming to 1.5 degrees Celsius, in accordance with the Paris Agreement's goals.

Norway's wealth fund, also known as the oil fund, is paradoxically fueled by the Norwegian government's oil revenues.

It is worth over $1,200 billion and has stakes in over 9,000 businesses in 70 countries.

So far, only about 10% of these businesses have set a carbon neutrality goal.

The fund's goal is to assist groups in which it is invested in developing a climate plan through dialogue, voting rights at general meetings, and, "as a last resort," divesting its shares, Ihenacho explained at a press conference.

The fund has already sold its holdings in four companies with excessive greenhouse gas emissions.

The new plan follows the Norwegian government's decision to strengthen the climate mandate of the fund.

The fund's value fell by 1,680 billion kroner in the first six months of 2022, owing primarily to volatility in global stock markets.

The only sector to show a positive return was the energy sector, which included oil and gas companies that benefited from rising prices in the aftermath of the war in Ukraine.