A government-appointed panel rejected calls for Norway's $870 billion Government Pension Fund Global, Oslo, to sell out of coal and other fossil-fuel producers, arguing active ownership is more effective against climate change.
“Climate is a serious question, and it deserves more than symbolic acts,” said Martin Skancke, an economist and former head of the asset management unit at the Finance Ministry, who led the panel, at a news conference Wednesday. “It would be a shame if we folded our hand in companies where we have the opportunity to be a demanding owner.”
The group recommended against “automatic exclusion of all coal and petroleum producers from the fund,” it said in its report. It advised that the fund adopt new exclusion criteria, looking on a case-by-case basis at which companies are “severely harmful to the climate,” while also integrating climate risk in its investment strategy.
When appointing the panel in April, Norway's Finance Minister Siv Jensen warned against making drastic changes and imposing limits on the fund's investment strategy. The group was appointed in response to calls for banning the fund from investing in coal companies and oil and gas producers. The minority government, which consists of the Conservative and Progress parties, in March defeated a proposal by the opposition Labor Party to exclude coal companies.
“We believe the use of the fund as a climate policy instrument beyond what is compatible with its role as a financial investor would be both inappropriate and ineffective,” the group said.
The fund had about 40 billion kroner ($5.7 billion) invested in mining companies, including 2.5 billion kroner in coal miners at the end of 2013, according to the report.
