Norway’s sovereign wealth fund, the largest in the world, has confirmed it will divest from coal. The move comes after the fund faced increasing pressure from the fossil fuel divestment movement.
The $900 billion (£590bn) government fund will sell off stocks in companies that generate more than 30% of their output or revenue from coal. Companies with coal projects in development that would see them cross the 30% threshold will also be included in the divestment process. The stakes in the companies will be sold by January 1 2016.
Norway’s parliament voted unanimously in favour of divestment and the decision is expected to affect between 50 and 75 international companies, according to finance ministry calculations. The holdings that will be dropped represent around 35 to 40 billion kroner (£2.9-3.3bn).
The pension fund has taken several steps in recent years to ensure that its investments are responsible. Earlier this year, the Norges Bank, which manages the fund, called for the companies it invests in to test their business strategies against global climate change efforts. The move was described as the potential start of a “tipping point”.
Given the size of the pension fund, environmentalists suggest the decision could have far reaching implications and encourage others to follow suit.
Marianna Marthinsen, an opposition Labour member of parliament, said, “This could influence the way other big investors view coal as an investment. The rest of the world is taking note of this decision.”
Photo: Greg Goebel via Flickr
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