Norway’s $1 trillion sovereign wealth fund, which manages $1 trillion of the country’s assets, has been given the go signal to dump more than $13 billion in stocks linked to fossil fuels, becoming the largest fossil fuel divestment to date.
According to a report from Reuters, Norway’s parliament approved on Wednesday the government’s plan to divest oil and gas stocks in its massive $1 trillion wealth fund by limiting its investments to companies that mine less than 20 million tonnes of coal annually. This means that the world’s largest fund would no longer invest in companies that could generate more than 10 gigawatts (GW) of power from coal.
The parliament has also agreed to allow the sale of smaller exploration companies and ban an estimate of 150 companies that are classified by the index provider FTSE Russel as part of the exploration and production subsector. These include big producers such as Royal Dutch Shell Plc, Exxon Mobil Corp, Chesapeake Energy Corp., Cnooc Ltd., Cairn Energy Plc, and many more.
“What this does do … is give a very clear signal to both governments and companies that the time for financing fossil fuels is coming to an end, for the benefit of both people and planet,” said Martin Norman, Sustainable Finance Campaigner at Greenpeace in Norway.
According to two climate groups, Urgewald and Future in our Hands Norway, about 8 coal companies are likely to be divested, resulting in a total of $5.8 billion in stock and bonds.
“The big story in energy economics over the next decade will be the storming of the bastions of fossil fuels by renewable energy sources that are cheaper to build and run, orders of magnitude cleaner and also much easier and quicker to deploy,” explained Mark Lewis, head of sustainability research at the investment bank BNP Paribas.
