Norway to ditch $13 billion worth of fossil fuel investments

Over $13 billion in stocks linked to fossil fuels is set to be dumped by the Norwegian government, after politicians agreed to divest its sovereign wealth fund earlier this month.

After more than a year of deliberation, additional changes will be made including selling smaller exploration companies. The finance ministry website has a list of 150 O&G companies that will be phased out – but the likes of Royal Dutch Shell and Exxon Mobil Corp will be spared. It is nevertheless a milestone for this huge oil-producing country.

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.

Greenpeace welcomed it, saying that: “What this does ..is give a very clear signal to both governments and companies that the time for financing fossil fuels is coming to an end, for the benefit of both people and planet.”

The country’s government maintains it is more a matter of reducing exposure to crude prices, with Finance Minister Siv Jensen saying: “It reflects to a larger extent the risk we ourselves have — the bulk of the state’s exposure in Norway is upstream activity. We’re reducing our vulnerability by choosing to withdraw the fund gradually from this segment.”

Where change is more certain is with the country’s coal investments. Investment will be banned with companies that are dependent on more than 30% of their income coming from coal mining or produce more than 10,000 MW of electricity form coal.

Known locally as The Fund, it’s been developed over the past twenty years of oil and gas proceeds and aims to ensure responsible management so that the wealth benefits both current and future generations. After the country discovered oil in 1969, it decided in 1990 to adopt the Government Pension Fund Act and in 2017 it was valued at $1 trillion.

Previously the fund had proposed a full divestment of the sector, yet Jensen defended the decision. Pointing to Equinor ASA which is increasing the investment it’s making into renewable energy – similar to Shell – she said that “It would be sad if the pension fund would not be able to invest in those companies in the future.”