Norway Divests from Coal
By admin June 4, 2015

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Norway’s sovereign wealth fund, the richest in the world at USD $900 billion and claiming about 1 percent of the world’s stocks and bonds, dropped over 50 coal companies in 2014 due to the threat of climate regulations. These include companies such as mining firms and utilities that have at least 30 percent of their revenue from coal. Norway’s Government Pension Fund Global (GPFG), founded on the nation’s oil and gas resources, is divesting from fossil fuels by selling off holdings to 53 coal companies. Sixteen of these companies include Peabody Energy and the mountain-top-removal companies Arch Coal and Alpha Natural Resources, as well as 13 Indian companies, including Coal India. However, some have noted that GPFG reinvested in Reliance Group, one of the biggest developers of coal-fired power plants across Asia.

Previously the GPGC was called the “Oil Fund.” Initially, when it was set up in 1990, it focused on government bonds but branched out to other markets such as the tobacco and fossil fuel industries. Its purpose was to counter the effects of decline in income and smooth out disruptive effects of fluctuating oil prices. In 2004, Norway set up the Council on Ethics for the Oil Fund.

In total the GPFG divested from a third of the coal companies in its portfolio. However, Heffa Schuecking, director of the German NGO Urgewald, believes this is only a small step. “The overall result is very disappointing as the GPFG’s total investments in the coal industry show only a marginal decrease.” Although the fund dropped many Indian coal companies, it has increased investments in the Chinese coal sector. Private pension funds, such as KLP, divested from coal completely in 2014. Truls Golowsen, of Greenpeace Norway, believes that “investing oil proceeds into the coal industry is the worst possible use of [the] nation’s money.” Additionally, as stated by Nick Nuttall the official spokesman of the UN framework convention on climate change (UNFCCC), “[d]ivestment sends a signal to companies, especially coal companies, that the age of ‘burn what you like, when you like’ cannot continue.”

Some believe that this divestment movement is about public relations. Rebecca Lerber, at the New Republic, stated that there is “scant evidence that these campaigns harm their targets financially.” The real achievement of divestments is to politically stigmatize the industry, some believe.

As the COP21, the crucial UN Climate Change Conference in Paris, approaches Norway’s parliament has a chance to show responsible investment by dropping coal, the most harmful fossil fuel for the climate. This can be seen as either a political move to send a message about climate change or purely economic. As Arild Hermstad, from the Future in Our Hands, Norway’s largest environmental organization, states, “[t]he GPFG’s coal investments are tiny in relationship to its total holdings, but the problems they cause around the world are huge.” In the future, to maintain its green image, Norway will have to create additional clean-tech jobs and begin exporting clean technology, while transitioning out of fossil fuels.


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