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| Norway's $900bn sovereign wealth fund told to reduce coal assets | Norway's $900bn sovereign wealth fund told to reduce coal assets |
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| Norway’s $900bn sovereign wealth fund, the world’s largest, should cut its exposure to the global coal industry and sell stakes in firms that focus on the sector, a key parliamentary committee said on Wednesday. | Norway’s $900bn sovereign wealth fund, the world’s largest, should cut its exposure to the global coal industry and sell stakes in firms that focus on the sector, a key parliamentary committee said on Wednesday. |
| The finance committee agreed in a bipartisan motion that the fund, which owns about 1.3% of all listed companies globally, should sell stakes in firms that generate more than 30% of their output or revenues from coal-related activities. | The finance committee agreed in a bipartisan motion that the fund, which owns about 1.3% of all listed companies globally, should sell stakes in firms that generate more than 30% of their output or revenues from coal-related activities. |
| Already under pressure from Norway’s political establishment, the fund has been selling down its coal portfolio in recent quarters and said its holdings were already small. | Already under pressure from Norway’s political establishment, the fund has been selling down its coal portfolio in recent quarters and said its holdings were already small. |
| “Investing in coal companies poses both a climate risk and a future economic risk,” the parties said in a joint statement. | “Investing in coal companies poses both a climate risk and a future economic risk,” the parties said in a joint statement. |
| “Coal is in a class by itself as the source with the greatest responsibility for greenhouse gas emissions, so this is a great victory in the battle against climate change,” opposition Labour MP Torstein Tvedt Solberg added. | “Coal is in a class by itself as the source with the greatest responsibility for greenhouse gas emissions, so this is a great victory in the battle against climate change,” opposition Labour MP Torstein Tvedt Solberg added. |
| The law still needs to be approved by parliament and the final vote is due to be held on Friday 5 June. | |
| The minority rightwing government, which originally proposed softer criteria, also warned that adding too many investment criteria could lower the fund’s long-term returns. | |
| “If you start to add non-financial aims or constraints to the management that will affect returns for the fund and that does mean lower welfare and standard living for future generations. It might lead to lower returns,” finance ministry state secretary Paal Bjoernestad said on Wednesday. | |
| The new exclusion criteria would be applicable to producers, such as mining firms, and consumers, such as power generators, the committee said. | The new exclusion criteria would be applicable to producers, such as mining firms, and consumers, such as power generators, the committee said. |
| The fund, managed by the central bank, would make the actual divestment decisions, also taking into account if companies plan to reduce their coal exposure. | |
| Its coal mining assets totalled 493m krone (£42m) at the end of the first quarter, down from 805m krone three months earlier while its general mining assets were worth 31bn krone and power production 109bn krone. | |
| Environmental groups dispute the coal exposure calculation, however, and say the actual figure is much larger because it does not include such companies as BHP Billiton, one of the world’s biggest coal firms, because coal is a relatively small part of their business. | Environmental groups dispute the coal exposure calculation, however, and say the actual figure is much larger because it does not include such companies as BHP Billiton, one of the world’s biggest coal firms, because coal is a relatively small part of their business. |
| The value of the shares that will be divested could be as much as $5.5bn, including stakes in big European and US power companies, head of Greenpeace in Norway, Truls Gulowsen, said. | |
| Heffa Schücking, who has written several reports on Norway’s wealth fund, said: “This is fantastic news and it will send a strong signal to investors all over the world. Coal is yesterday’s fuel.” | |
| The proposal to divest the fund had support from two out of three Norwegians in a recent poll. “Most Norwegians have high expectations of a strong effort to curtail climate change from their politicians,” said the head of WWF Norway, Nina Jensen. “Today we see those politicians deliver on those expectations. This is a day where we want to congratulate all the parties of the Storting [the parliament], which together have made a wise and future friendly decision.” | |
| The Guardian’s Keep it in the ground campaign, urging the world’s biggest charitable funds to move their money out of fossil fuels, has so far attracted more than 200,000 signatures. |