Norway's $1 Trillion Fund to Dump Oil and Gas Shares
Norway's $1 trillion wealth fund, the biggest of its kind in the world, will begin dumping shares in oil and gas companies, but stopped short of barring major producers like ExxonMobil and Chevron.
The move was hailed by environmental activists as a sign that the global economy is increasingly moving away from fossil fuels toward cleaner energy.
The financial impact, however, may be relatively limited. The move will focus on companies that trade solely in exploration and production rather than the integrated oil giants, which do everything from searching for fossil fuels to selling them to consumers.
The fund is looking to sell some $7.5 billion in shares in 134 energy companies over time.
The Norwegian government said its motivation was not climate activism but financial. The fund, somewhat ironically, derives its income from Norway's booming oil and gas industry. So reinvesting those proceeds in other sectors is considered a way to keep the money safe should oil and gas prices fall.
Tax receipts from oil production have made Norway rich. They underpin generous welfare provisions. And a hefty proportion is siphoned off into the fund, which was conceived as a pension kitty for the country's 5.3 million inhabitants.
Integrated oil giants were not banned from the fund's investments in part because those companies are considered most likely to invest in green energy - a market the Norwegian government is keen to profit from.
The Norwegian fund has a stake in more than 9,000 companies worldwide, including the likes of Apple, Nestle, Microsoft and Samsung. On average, the fund holds 1.4 percent of all of the world's listed companies. About 70 percent of its holdings are in shares. /Source: U.S.News/
March 8, 2019