Vandana Gombar: Norway’s coal exit creates ripples
When the world’s largest sovereign wealth fund decides to exit investments in coal, the ripples of the decision can be felt the world over.
Late last month, Norway’s parliament decided that the $900-billion sovereign wealth fund should exit from utilities and miners that get 30 per cent of their business from coal, a move that could trigger as much as $5 billion of divestments. The companies that could be impacted by this decision – to be implemented by January 1, 2016 – include RWE (Germany), Duke Energy (the US), SSE (the UK), AGL Energy (Australia), Reliance Power (India) and China Shenhua Energy, according to a Bloomberg News report.
“Investing in coal companies poses both a climate-related and economic risk,” said Svein Flaatten, a Conservative member of the parliamentary committee, which decided on the coal ban.
While this decision by the fund could inspire other large investors, the fossil fuel divestment movement has already been building up considerable steam. The most recent addition to the list of organisations eschewing coal was France’s largest insurer, Axa. Chief Executive Officer Henri de Castries said he’s working to sell euro 500 million of coal assets even as he triples “green investments” to euro 3 billion by 2020.