Fossil fuels? This fund says Norway.
It’s Friday, June 14, and one of the world’s biggest sovereign wealth funds is dumping fossil fuels.
This week, Norway’s sovereign wealth fund, a state-owned investment reserve that wields $1 trillion, decided to divest part of its assets from fossil fuels. That means about $13 billion controlled by the Government Pension Fund Global will no longer go to oil, gas, and coal concerns.
The fund will sell its stakes in mainly smaller fossil fuel companies. Its investments in major oil companies will remain unchanged for the time being. The fund still has a 2.5 percent stake in Royal Dutch Shell and a nearly 1 percent stake in ExxonMobil.
It will also shift about 2 percent of its investments to renewable energy projects and companies. I know what you’re thinking: a measly 2 percent? That’s nothing! Not so. That’s $20 billion dollars.
What’s notable about this week’s news is that Norway’s parliament made the decision to divest from some fossil fuel companies not only because of environmental reasons and political pressure, but as a result of financial concerns. Investors want long-term value, and it’s becoming clear that fossil fuels can’t deliver on that front.
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