Saturday

2nd Jul 2022

Norway bans pension fund from coal investment

  • Companies that receive more than 30 percent of their revenue from coal-fired power plants, will be banned from Norway's pension fund (Photo: BiLK_Thorn)

The Norwegian parliament has unanimously voted on Friday (5 June) to ban its pension fund from investing in coal companies, a decision which will lead to the largest politically motivated withdrawal of funds from the fossil fuels sector.

The fund will be forbidden to invest in “mining companies and power producers for whom a significant part of their business relates to coal used for energy purposes”.

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The parliament decided that 'a significant part' means having 30 percent or more of revenue from coal, and/or having 30 percent of activities in coal mining or power.

Norway's finance minister estimated that between 50 to 75 companies that are currently being funded by the pension fund could fall under the criteria for the ban, and that an investment of 35-40 billion kroner (€4 -4.6 billion) is involved.

Greenpeace however estimated a far higher number and said 122 companies fall under the new criteria, worth 67.2 billion kroner (€7.7 billion).

Coal is the most polluting of fossil fuels.

The 6.9 trillion kroner (€791 billion) fund is one of the largest sovereign wealth funds in the world, and perhaps ironically is the result of Norway's surplus income from another fossil fuel: oil.

All of Norway's political parties had already agreed they would support the ban.

“Investing in coal companies poses both a climate risk and a future economic risk”, the parties noted in a common statement last week.

“This is a clear signal to those who use coal that they have to look at other forms of energy,” centre-right Norwegian MP Hans Olav Syversen told public broadcaster NRK.

Environmental organisations have praised the decision.

“This is the biggest divestment action to date from the coal industry and sets a new standard for investors worldwide,” said Greenpeace.

Divestment refers to the opposite of investment: removing funds that is being used for a particular sector. The past years have seen a rise in the so-called fossil fuel divestment movement.

The Dutch centre-left governing Labour party this week also put divestment on the agenda. MP Jan Vos, the party's energy spokesperson, said Dutch pension funds should divest away from fossil fuels.

Norway's oil capital braces for change

Stavanger, a city which has flourished because of the oil industry, starts to see the need to diversify. Meanwhile, a green movement has gathered momentum.

EU apathetic on fossil fuel divestment

Organisations around the world have pledged to remove €2.3 trillion in investments from oil, gas, and coal companies. However, MEPs have yet to convince political leaders to hold a debate about it.

Green crime-fighting boss urgently required, key MEP says

The European Parliament approved last week a non-binding resolution on illegal logging, calling to extend the EU public prosecutor's mandate to also cover environmental crime. The lead MEP on the file has called for urgent implementation.

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