Norway capped an extraordinary week in the escalating coal-gas war on Friday when its parliament voted to order the fund to shift its holdings out of billions of dollars of stock in companies whose businesses rely at least 30% on coal.
The order will take effect on January 1 next year, giving further momentum to the global campaign to pressure organisations to dump all fossil fuel investments.
This move has been met with more than just a raised eyebrow from the oil industry, considering Norway’s sovereign wealth fund has been built on more than four decades of North Sea oil production.
Norwegian Finance Minister Siv Jensen said the ban could apply to up to as many as 75 companies in which the fund has invested some $4.5 billion.
“Investing in coal companies poses both a climate risk and a future economic risk,” the seven Norwegian parties said in a statement.
Norway’s Labour Party’s Torstein Svedt Solberg, who acted as the rapporteur for the negotiations, called the vote “a great victory for the climate”.
“Coal is in class of its own and is the source responsible for the largest emissions of greenhouse gases,” Soldberg said.
Soldberg said that the deal had been reached after long and detailed discussions, indicating there was not much chance of the parties disagreeing on the issue in a major way.
However, Norway’s fund has already been downsizing its holdings of pure-play coal mining companies, having revealed at the start of the month that it had cut its investment in the sector by two fifths since the start of the year.
The threat to oil and gas in Norway is real. Activist group 350.org delivered 44,000 petition signatures just before parliament voted, urging politicians to divest their Global Pension Fund from fossil fuels, starting with companies mining and burning coal.
A ‘Twitterstorm’ to #DivestNorway was also triggered by the movement.
350.org said that while coal investments make up only 1.2% of the fund’s investment portfolio, this alone was enough to make the fund one of the 10 largest coal investors in the world.
Greenpeace Norway’s Truls Gulowsen said Norway’s vote would lead to billions of euros being withdrawn from the coal sector globally.
“This is a huge win for the divestment movement and a real sign of hope that investment patterns can be changed,” Gulowsen said.
350.org expects that Norway’s Pension Fund investments in companies such as Germany’s RWE, China’s Shenhua, US utility Duke Energy, Australia’s AGL Energy, India’s Reliance Power, Japan’s Electric Power Development Corporation, the Philippines’ Semirara Mining and Poland’s PGE.
An AGL spokesperson told International Coal News: “AGL is Australia’s largest investor in renewable energy generation in the country we also have an industry-leading commitment to the responsible management of greenhouse gas emissions. For example, our greenhouse gas policy released this year commits us to not extending the operating life of existing coal-fired generation and closing down all coal-fired generation in our fleet by 2050.
“At the Australian Council of Superannuation Investors Conference in Sydney during May 2015, the United Nations Framework Convention on Climate Change stated that ‘High-cost, high-carbon assets are already being impacted’ but we need to ‘avoid abrupt seismic shifts’ and ensure an ‘orderly transition of capital and technology’
“AGL encourages stakeholders to continue to engage with the company and also the government.”
Meanwhile, German environmental group urgewald’s Heffa Schucking said Norwegian NGOs would “not be alone when they celebrate” the vote.
“There are broad popular resistance movements against the coal industry in all of these countries, and they are going to say: Thank you for divesting, Norway,” Schucking said.
This global fossil fuel divestment campaign has already claimed the Church of England, which announced last month it would drop companies involved with coal or oil sands from its $14 billion investment fund and France’s largest insurer AXA announcing it will scrap holdings in coal companies.
The Rockefeller family, whose fortune comes from Standard Oil, pledged last year to remove fossil fuel investments, starting with coal, from its philanthropic Rockefeller Brothers Fund.
Also last month, 120 investor CEOs from around the world managing funds worth more than $12 trillion wrote an open letter to finance ministers ahead of the G7 Finance Ministers in Dresden, Germany, urging them to support the inclusion of a long-term emissions reduction goal in the international climate agreement due to be sealed in Paris in November.
Norwegian biologist and Green party member Rasmus Hansson told Norway’s E24 financial newspaper that parliament sent a “very important signal” heading into negotiations on a global climate agreement: “Norway will not invest our savings in destroying the earth's climate.”
Progress Party MP Tom Holthe told E24 that the party, which had traditionally been sceptical of many environmental measures, had won some major concessions, limiting the abruptness with which the oil fund would have to make its divestments.
He said the instructions would allow the fund to temporarily continue to invest in companies where coal represented more than 30% of revenue, so long as they demonstrated an ambition to bring themselves below the threshold.
Norway’s state-owned oiler Statoil made a major plea least week urging for greater climate responsibility, firstly co-signing a letter with fellow European majors Royal Dutch Shell, BP, Eni and Total urging the UN to help governments introduce linked carbon pricing systems.
In the letter, Europe’s oilers made a major play to differentiate themselves from coal, saying gas was the sustainable answer to the world’s growing energy needs – a call re-iterated at the World Gas Congress in Paris by Woodside Petroleum CEO Peter Coleman.
Then, in its Energy Perspectives report, Statoil economist Eikik Waerness said the growth in people moving to the middle class paralleled with increased carbon dioxide emissions, the latter of which was “not sustainable in the long-term”
