NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, June 9, 2015

Directors of the Norwegian sovereign wealth fund, an investment pool worth more than $900 billion, will sell many of its coal industry holdings, officials said last week.

Norway’s Parliament voted Friday to ratify the decision, made a week before by the body’s finance committee. Parliament ordered the fund to sell stakes in mining and power companies that directly, or indirectly, base 30 percent or more of their revenue or their regular activities on coal.

The new screening method will go into effect in 2016. Petter Johnsen, the fund’s chief investment officer, said in May that the new policy would affect between 50 and 75 listed companies.

An analysis of the fund’s portfolio completed by Urgewald, a German advocacy group, as well as Greenpeace and Framtiden i våre hender, a Norwegian environmental advocacy organization, found this new policy is the largest coal divestment action to date.

“Norway’s decision to take a stand against coal is an example for other governments — and investors — about shifting from polluting energy sources towards clean, renewable power,” said Kumi Naidoo, Greenpeace International’s executive director, in a statement.

The fund holds roughly $4 billion to $5 billion in those 50 to 75 companies and invests in 122 companies that would fall under the new divestment criteria, a higher total than Norway’s finance minister has indicated, according to the environmental groups.

Altogether, the assessment found, the holdings at risk to be sold add up to €7.7 billion., or $8.56 billion.