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IEEFA Lauds Norwegian Lawmakers for Moving $900 Billion Pension Fund Toward Divesting Further From Risky Coal Assets

May 27, 2015

CLEVELAND, May 27, 2015 — The Institute for Energy Economics and Financial Analysis (IEEFA) applauded members of Norway’s Parliament for voting today for instructing the Norwegian Government Pension Fund Global (GPFG) to reduce its exposure to fossil-fuel risk by divesting more of its coal-related holdings.

“This is a financially defensive and prudent course of action to protect the fund from further losses from its coal-mining and coal-burning power-generation investments,” said Tom Sanzillo, IEEFA’s director of finance. “Coal markets globally are in the midst of a wrenching structural decline. No investment fund in the world—be it university, pension or institutional—can make a compelling financial case to hold these equities in their portfolio any longer.”

Sanzillo said Norway’s move would most likely spark similar divestment by other large pension funds. The divestiture—which was approved by a key committee today and goes now to the full Parliament—would include all companies that rely on coal for more than 30 percent of revenues.

The Norwegian direction follows publication earlier this month of an IEEFA report, “The Case for Divesting Coal from the Norwegian Government Pension Fund Global,” that presented a grim outlook for the coal industry and said prudent investors should steer clear of coal holdings now and for the foreseeable future.

The report, authored by Sanzillo, noted that coal-company stock prices have collapsed in recent years and that the stocks of coal-burning utilities are in decline too. It points out that over the past five years, the Stowe Global Coal Index has lost 71 percent of its value, and that while coal will remain part of the global industrial energy mix, its share of that mix stands to continue to fall over time.

“Coal stocks are in deep decline as the global economy has made modest gains,” Sanzillo said. “The leadership of the coal industry has only itself to blame for failing to engage in a constructive manner with investors, governments and regulators and now must bear the brunt of the largest fund in the world looking elsewhere to meet its financial targets.”

Sanzillo added, “The coal industry has failed to compete with other energy resources, particularly wind, solar and energy efficiency. Its various export and trading schemes have only resulted in further deterioration of share value. Coal stocks are losing money every day. No investment policy that I am familiar with can holding stocks in an industry with catastrophic losses and with no realistic case for an upside for the foreseeable future. Norway has led, and I suspect they will not be alone for long.”

GPFG is the largest pension fund in the world. Its total coal sector holdings are valued at NOK 85.5 billion (US$11.4 billion). Norges Bank Investment Management, an arm of the Norwegian Central Bank, manages the Fund for the Norwegian Ministry of Finance.

Media contact:
Karl Cates
[email protected]

Director of Finance Tom Sanzillo is available for interview. Mr. Sanzillo has 30 years of experience in public and private finance, including as a first deputy comptroller of New York State, where he held oversight over a $156 billion pension fund and $200 billion in municipal bond programs.


The Institute for Energy Economics and Financial Analysis (IEEFA) conducts research and analyses on financial and economic issues related to energy and the environment. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy and to reduce dependence on coal and other non-renewable energy resources.

Tom Sanzillo

Tom Sanzillo is Director of Financial Analysis for IEEFA. He has produced influential studies on the oil, gas, petrochemical and coal sectors in the U.S. and internationally, including company and credit analyses, facility development, oil and gas reserves, stock and commodity market analysis, and public and private financial structures.

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