Norway’s state fund to put a freeze on coal
NORWAY’S parliament last week voted to pull its sovereign wealth fund — the world’s largest — out of coal, in what is seen as a major victory for environmentalists.
It voted unanimously on Friday that the fund — worth almost 7,000billion krone (about R11-trillion) — must sell its holdings in mining and power companies that generate more than 30% of output or revenue from coal. The decision is expected to affect 50 to 75 international companies, representing holdings of up to 40-billion krone.
Environmentalists say the effects could be even more wide-reaching, with some estimates of 122 firms representing 67.2-billion krone.
The stakes will have to be sold by January 1. The names of the companies affected have not been disclosed. The fund has shares in more than 9,000 companies.
According to a study by a coalition of nongovernmental organisations, the measure will affect 35 US firms, a dozen Chinese companies, eight from Japan, German energy giants EON and RWE, Britain’s SSE, India’s Reliance Power, Italy’s Enel, Spain’s Endesa, Portugal’s EDP, Sasol, South Korea’s Korea Electric Power, Sweden’s Vattenfall and Denmark’s Dong.
Given the size of the Norwegian fund, the step is seen as a major victory for the international campaign to end the use of highly polluting coal, six months ahead of an international climate conference to be held in Paris in December.
“This could influence the way other big investors view coal as an investment,” said Marianne Marthinsen, an opposition Labour member of parliament.
Norwegian MPs pointed out that their decision was not just a response to climate change, but also based on financial considerations: coal assets are bound to plunge as climate change efforts increasingly call for coal use to be reduced.
Truls Gulowsen, head of Greenpeace Norway, said the decision would “most likely” be followed by others. Some Norwegians have called for parliament to go further and withdraw the sovereign wealth fund — which is fuelled by Norway’s state oil revenues — from all fossil fuels.
In a paradoxical decision linked to geopolitical considerations, the government recently agreed to rescue the miner Store Norske, which extracts coal in the pristine Svalbard archipelago in the Arctic.