You wouldn’t expect a $27 billion minnow to be a leader in an industry where the biggest players boast hundreds of billions in assets.

Yet ask a sovereign-wealth-fund expert which fund has taken the helm on the environment, and they’ll almost invariably point to the New Zealand Super Fund (NZSF). Usually followed by the $1 trillion beluga whale of Norway.

If that sounds like something of an indictment on the industry, that’s because it is. New Zealand’s nimble little fund is rightly praised for its dynamism and strong rates of return, which average 10% per year since its foundation in 2003. The proportion of renewable assets in its portfolio is about ten times the industry average. Which sounds great—until you realize the industry average is 0.19%, and NZSF’s is around 2%, according to a spokesperson.

The figures are concerning not just for the environment—which, experts say, needs institutional investment to be saved—but for major funds themselves,  a majority of which are owned by oil-rich nations. Many funds were created to bolster their countries’ economies against the volatility of fossil fuels prices, but now they risk becoming “stranded nations” if they don’t properly embrace climate change, with their oil and gas reserves set to eventually become worthless, warned a recent World Economic Forum report.

Despite not being rich in fossil fuels, the NZSF came to the same conclusion in 2016, announcing that “climate change is a market and policy failure,” with fossil fuels prices failing to reflect the cost of pollution. A year earlier, a study it had co-commissioned showed returns from coal could drop by 18% to 74% in 35 years and renewables could grow by 6% to 54%.

The fund decided: “We think there’s a risk, we need to do something about it,”

CEO Matt Whineray told Quartz. “Everyone calls [fossil fuels] ‘stranded’—you might as well just call them the risk of ‘worthless assets.'”

Their first move? Shift a lot of the carbon in their portfolio. They aimed to cut the emissions produced by assets in their portfolio by 20% and the amount of carbon reserves in their portfolio by 40% by 2020. By the end of 2018 they were on track, having cut 18.7% of emissions and 32.1% of reserves. (The fund doesn’t measure the dollar amount divested from fossil fuels.)

Other SWFs have made similar moves. Ireland’s parliament has ordered its fund to divest from fossil fuels entirely, and Norway is divesting from coal and companies focused on discovering new oil and gas reserves.

But divesting isn’t enough. “What this doesn’t do is necessarily change the outcome from a global perspective, right? Because all we’ve done is sell those companies to someone else,” he says. “The change actually comes where you’re applying capital to change things that are going to change the technology, or adapt or mitigate the physical impacts of climate change.”

Alongside divesting, they have two proactive strategies. One is to follow the Norwegian model of using shareholder voting power to push for better environmental policies among companies it has stakes in. The second is to find good investments in green companies. The safest bets at the moment are generally in renewable-energy projects or infrastructure, but they’ve also thrown some Kiwi dollars at the tricker sphere of green tech, including Rubicon Global, which aims to reduce emissions from waste by increasing recycling rates, and LanzaTech, which turns pollution into fuel that powers cars.

In the grand scheme of things, however, New Zealand’s own actions are pretty inconsequential. The big impact will come when giant SWFs start putting their cash in renewables. There are a few signs of that with the UAE’s ADIA and Singapore’s GIC buying big stakes in Indian green projects, but, ultimately, Whineray thinks money will only really start to move with a change in policy. If you can say, “‘Ah look, the price of carbon is going to be 100 bucks a ton,’ then you will see people starting to allocate capital toward [renewables] because there’s less perceived regulatory risks,” he says.

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