$900-bn Norwegian wealth fund to divest up to 75 coal stocks

28 May 2015


Norway's $900 billion wealth fund might have to sell out of 50 to 75 companies once new rules limiting its coal investments take effect, Reuters reported quoting Petter Johnsen, the fund's chief investment officer for equities.

The fund's holdings in the firms have been valued at around 35 to 40 billion Norwegian crowns ($4.5 billion-$5.2 billion), Johnsen said on the sidelines of a seminar, today.

The finance committee of the parliament ruled in a bipartisan motion yesterday that the fund, which owns about 1.3 per cent of all listed companies globally, needed to sell stakes in firms that generated over 30 per cent of their output or revenues from coal-related activities.

Both producers and consumers of coal would be included in the ban.

Meanwhile, the fund had put more money into coal just three months after a high-profile pledge to dump fossil fuels as part of its commitment to responsible investing, according to financial analysis by three environmental groups.

Rather than cutting overall exposure to businesses based on coal, the Norwegian Government Pension Fund (GPF) upped its holdings by 3 billion Norwegian kroner to 85.8 billion by the end of last year, according to the report Still Dirty, Still Dangerous said.

According to commentators, the finding underlined the difficulties of ensuring investors delivered on pledges to get out of coal, oil and gas in response to an anti-apartheid style global divestment campaign.

Others, including a key parliamentary committee yesterday, had called on the Norwegian pension fund, to exit coal for financial reasons. Global coal stocks had fallen over 70 per cent in value over the past five years, the Institute for Energy Economics and Financial Analysis (IEEFA) said.

However, the Norwegian government pension fund remained one of the biggest single investors in coal mining companies and coal-based utilities, the report said.

While the fund withdrew from 32 companies last year for environment and climate reasons, it did not cut its overall holdings in the industry.

As per the report's calculations, the Norwegian fund had investments in companies responsible for 23 per cent of global coal production.

The fund had only reshuffled its investments between coal mining companies and electricity producers that relied heavily on coal, the report published by Future in Our Hands, Greenpeace Norway and the German NGO, Urgewald, said.

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