Norway forces sovereign wealth fund to go greener
Norway's sovereign wealth fund, the world's largest at more than $1 trillion, is set to become greener by withdrawing further from fossil fuels, the Norwegian parliament decided on Wednesday.
To comply with the new directive, the fund looks set to divest assets in mining giants working with coal, such as Glencore, BHP Billiton and Anglo American, and energy companies such as Germany's RWE and Italy's Enel.
Previously, the fund was told to only keep clear of mining companies or energy producers whose coal-related activities represented 30 percent or more of their business.
But that allowed large coal players to slip through the cracks since most of their revenue came from other activities.
Going forward companies will be judged on production levels and the fund won't be able to invest in companies producing more than 20 million tonnes of coal per year or more than 10,000 MW of electricity from coal.
According to several environmental groups, the fund will need to offload holdings in eight companies, worth an estimated 5.2 billion euro ($5.8 billion).
Parliament also endorsed the government's proposal to ban certain oil companies engaged exclusively in hydrocarbon exploration and production.
The new rules also give the fund more leeway to invest in companies with renewable energy projects, such as wind or solar farms, before they are listed on a stock exchange.
Changes to the priorities of the wealth fund are not entirely motivated by environmental concerns.
As the largest oil producer in Western Europe, Norway is seeking to limit the exposure of its public finances to a sector that is being challenged, including by investors, because of climate concerns.
June 14, 2019