Norway’s sovereign fund drops 32 coal mining firms from its portfolio

Our Bureau New Delhi | Updated on January 24, 2018 Published on March 16, 2015

The sovereign fund that sectors with high emissions may be subject to greater regulations in future

Exits from 13 Indian cos, including Adani, Coal India, NTPC

One of the biggest sovereign wealth funds in the world has started moving away from coal, dropping 32 coal mining companies from its portfolio in 2014. Of these, 13 are in India.

Norway’s Government Pension Fund Global (GPFG) has dropped its investments in these companies citing higher risks.

“As part of our focus on climate change, we have looked at greenhouse gas emissions from companies in the portfolio. Companies that rely on value chains with particularly high greenhouse gas emissions may be exposed to risk from regulatory or other changes, leading to a fall in demand,” the fund has said in its recently released report on responsible investing.

Adani, Coal India, GVK, the Jindals and NTPC have been dropped, while in the UK, Essar Energy, which also has significant investments in India, has been left out by the fund, which is worth more than $850 billion.

₹622 crore value

According to an analysis by Greenpeace India, the fund’s total coal divestment, just in India, is worth over ₹622 crore.

“In 2013, the fund had ₹82 crore ($13 million) invested in Coal India and ₹325 crore ($51 million) in NTPC,” the Greenpeace India analysis said.

“The fact that the world’s biggest sovereign wealth fund has decided that coal is a risky investment in India should set alarm bells ringing with shareholders and investors, domestic and foreign,” said Greenpeace campaigner Ashish Fernandes.

“Rising costs, corruption and community opposition to mines and power plants are ensuring that coal is losing out to renewables as the energy source of the future,” he added

The Norwegian Fund has also dropped five Australian, and 16 US-based coal companies. Further, it has axed firms operating in the palm oil, oil sands and cement sectors, among others. The primary focus of the sectoral analysis by the fund was based on greenhouse gas emissions.

With the world heading towards a global agreement on greenhouse gas emissions, several countries are changing their regulatory stance on sectors responsible for high emissions.

It is estimated that only about half the existing fossil fuels can be consumed globally if the world is to remain under the 2 degree Celsius warming that is being targeted, necessitating stricter actions on emissions.

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Published on March 16, 2015
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