The Norwegian Parliament voted Friday to remove coal investments from the country’s $890 billion government pension fund, which is considered the largest sovereign wealth fund in the world.
Under the new policy, power and mining companies whose activities or revenue are at least 30 per cent coal-related will be removed from the portfolio.
Norges Bank Investment Management, which manages the huge Norwegian fund, said its goal was “safeguarding and building financial wealth for future generations in Norway,” according to the New York Times. The reasons for divesting include “long-established climate-change risk-management expectations,” spokeswoman Marthe Skaar told the paper.
The decision will most likely force the Norwegian fund, called the Government Pension Fund Global (GPFG), to divest from 122 companies totaling $8.7 billion, according to calculations made by the environmental group Greenpeace and its partners.
“Norway’s decision to take a stand against coal is an example for other governments — and for investors — about shifting from polluting energy sources towards clean, renewable power,” Greenpeace International Executive Director Kumi Naidoo said in a statement.
Greenpeace identified 49 US-based companies or subsidiaries that the GPFG will no longer be able invest in, including major U.S. utilities and power producers like Duke Energy, American Electric Power, and NRG Energy.
The divestment is set to be carried out by Jan. 1, 2016.
Norway joins a growing list of organizations — including big universities, pension funds, and eventhe Church of England — that are divesting from coal. Coal is the largest stationary source of carbon emissions in the U.S., and reducing or eliminating coal use is seen as critical to preventing catastrophic climate change.
Norway’s divestment announcement has been criticized, though, for being slightly hypocritical: the GPFG is a so-called “oil fund,” meaning much of its investments will remain in fossil fuels, despite dropping coal.
“[This] is a day for celebration, but the GPFG will not be rid of every coal company in its portfolio as well as tens of billions of dollars still invested in the oil and gas industry,” said Truls Gulowsen, the head of Greenpeace in Norway, in a statement. “Norway is also still engaged in Arctic oil drilling, so while this is great news, there is still lots of work to do for Norway before it can brand itself as truly climate friendly.”
