Norwegian pension fund and insurance firm Storebrand has announced it will be further reducing its exposure to the fossil fuel industry in a bid to ensure long-term stable profits.
In a press statement, the organisation’s head of sustainable investment Christine Tøklep Meisingset said, “As a savings and pension provider our goal is to ensure long-term positive return for our customers. Part of that goal is achieved by reducing the risk in our portfolios, and climate change is the most comprehensive risk to sustainability. Therefore we have decided to further reduce our exposure to coal, this time in the utilities sector.”
In July last year, the company announced that it had divested from 19 fossil fuel companies, saying in the future these stocks would be “worthless financially”.
The new exclusions mean that 10% of the sector will no longer be eligible for investment. A total of 23 coal companies are now excluded from all Storebrand portfolios.
Meisingset added, “We will continue to have companies in our portfolios that have a share of their business related to coal, but we have removed those with the largest share in arguably the two most coal intensive sectors.”
The firm has made an exception for companies that have an above average share of power generation from renewable sources. Storebrand described the average share of renewable energy generation, which is 4%, as “awfully low”, adding it was important to support the companies changing to a more sustainable model.
The firm will now analyse the materials sector and consider further reducing its exposure to coal.
Last week, the firm also announced it would divest from 11 palm oil companies following deforestation and sustainability concerns. The firm will continue to invest in palm oil companies that meet its own environmental and social governance standards.