June 12, 2019 Read More →

Norway’s Parliament approves expanded divestment from fossil fuel investments

Wall Street Journal ($):

Norway’s sovereign-wealth fund is embracing renewable energy and winding down fossil-fuel investments.

The Scandinavian nation’s parliament voted on Wednesday to instruct its $1 trillion fund to pull an estimated more than $13 billion from oil, gas and coal extracting companies and move up to $20 billion into renewable-energy projects and companies, representing around 2% of the fund.

The Government Pension Fund Global—which has around 6% of its holdings in fossil-fuel equities—won’t pull investments from major oil companies, but will divest from smaller energy exploration and production firms, according to a proposal from the Ministry of Finance. The move could affect several of its U.S. investments including its 1.08% stake in Anadarko Petroleum Corp. , 0.98% in Occidental Petroleum Corp. and 0.96% in EOG Resources Inc.

Norway’s sovereign-wealth fund is one of the largest in the world, investing in nearly 9,200 companies globally as of the end of 2018, according to government data. It has a stake in some 341 oil-and-gas companies, the largest share in the U.S., at 31% of those holdings.

Norway forged its social wealth fund in 1990 with profits from the North Sea oil fields. The country’s divestment comes as government pension funds face mounting political pressure to exit fossil fuels and realign their strategies around green businesses and clean energy to meet the goals of the Paris Agreement on climate change.

While political forces helped drive the divestment, the decision also reduces financial risk because the oil-and-gas industry is no longer as profitable since the oil-price drop in 2014—while renewables are in a growth phase, said Tom Sanzillo, director of finance at the Institute for Energy Economics and Financial Analysis, a research firm.

More ($): Norway’s sovereign-wealth fund boosts renewable energy, divests fossil fuels


Comments are closed.