Norway’s municipal employees pension fund, the country’s largest, has sold its last remaining stakes in companies with operations in Canada’s oil sands, saying holding them does not align with efforts to keep global heating below internationally agreed-upon targets.
The fund, Kommunal Landspensjonskasse (KLP), last year dumped stocks that drew more than 30 per cent of their revenue from oilsands operations, but on Monday said they can no longer tolerate even those that have five per cent exposure.
KLP, which manages the pensions of Norway’s 900,000 nurses, firefighters and other employees of local governments and state-owned enterprises, said in a statement that it had jettisoned US$33 million worth of equity holdings and US$25 million in bonds from Canada’s Cenovus Energy, Suncor Energy, Imperial Oil (majority owned by ExxonMobil) and Husky Energy, as well as Russia’s Tatneft PAO.
Jeanett Bergan, head of responsible investments at KLP, said in a phone interview that “the message we really would like to get across is that companies and fund managers and investors all need to start managing this risk and making sure that they’re doing everything they can to be part of the transition that all societies need to do.”
KLP exited all stocks deriving more than 50 per cent of their revenue from coal five years ago, tightening that to 30 per cent in 2017 and five per cent this year. Last year, it used the 30 per cent cutoff to exit major oilsands companies including Canadian Natural Resources, MEG Energy Corp. and Athabasca Oil Corporation. KLP manages more than US$8 billion in total, of which 2 per cent is invested in fossil fuel and 5 per cent is in renewable energy.
“Canada’s high-cost oilsands have been a poor investment for years,” said Tom Sanzillo, director of finance for the Institute for Energy Economics and Financial Analysis (IEEFA). “The global market is oversupplied and likely to stay that way,” he added. “The high production costs will make them uncompetitive in an increasingly competitive global market.”