Stockholm (NordSIP) – The Norwegian parliament voted on Wednesday to require the country’s sovereign US$1 trillion wealth fund, the Government Pension Fund Global (GPFG), to selectively divest from fossil fuel companies, according to reports from Reuters. The fund is managed by Norges Bank Investment Management (NBIM).
Norway’s Storting, the country’s parliament, voted in favour of the government’s plan to cease investments from the sovereign wealth fund (SEF) in companies that mine more than 20 million tonnes of coal per year, or generate 10 gigawatts of power from coal.
“This means that the fund will stop investing in 150 oil and gas companies and eight large coal companies,” commented Greenpeace Norway. “In practice, this means that approximately NOK 50 billion is moved from coal, almost NOK 70 billion from oil and gas, and almost NOK 120 billion goes into unlisted renewable infrastructure.”
The decision affects the Norwegian fund’s US$1 billion stake in Glencore equivalent to to 2.03% of the company’s stock value at the end of 2018 as well as a US$ 620 million worth of holdings in mining company Anglo American, equivalent to a 2.16% stake in the company.
Other companies affected by this divestment decision will include Germany’s RWE, Australia’s South32 and Germany’s Uniper among others, according to the report.
The decision was anticipated in March by Sony Kapoor, CEO of think tank Re-Define who celebrated the then-upcoming success, ten years in the making. “It is surprising and disappointing that it has taken 11 years from when we first did the economic analysis to show that divestment made financial sense, for the government to act on our recommendation, but better late than never,” Kapoor complained. “We welcome this belated divestment, and very much hope the money freed up will be deployed in renewable investments.”
The limited scope of the divestments leaves room for further environmental improvements, according to Greenpeace.”But the Storting could have done more. The politicians should have followed the board of Norges Bank’s advice to sell themselves completely out of the oil and gas sector,” the activists explained. “Norway has too many eggs in the oil basket, and it seems quite obvious that the Storting should follow that advice. We lean too much on oil and gas when it comes to the Petroleum Fund’s investments, and this can in turn lead to a much worse situation when the oil price falls, for example, further.”
Kapoor agreed. “Sadly this does not mean that Norway is giving up on fossil fuels. Quite the opposite, as the record number of licenses issued for drilling and prospecting last year shows. This is just a first step, but Norway will need to do far more to diversify its single engine economy.”
“It’s just to fold up your sleeves and make sure that it happens next year,” says Greenpeace Sustainable Finance Manager Martin Norman.
Picture from Pixabay
