Norges Bank will exclude 15 bond issuers, including five U.S. companies, from the Government Pension Fund Global based on coal product exposure.
Norges, the money manager for the Oslo-based 7.5 trillion Norwegian kroner ($885 billion) Norwegian sovereign wealth fund, additionally put six U.S. companies and a total of 11 firms globally under investigation, a news release said.
The decision follows the guidelines from the Ministry of Finance introduced Feb 1, which stated: “Where thermal coal is a significant part of a company's business activities, the company may be excluded from the fund.”
Coal power companies and mining companies, which base 30% or more of their activities on coal or derive 30 % of their revenues from coal themselves or through operators were put under observation. In total, Norges Bank has so far excluded 59 companies and placed 11 companies under observation.
Norges' spokesman confirmed that the decision was not made to satisfy the plans to shift allocations to equity from bonds that were announced Dec 1, but he would not comment on how the funds will be reinvested.
More exclusions will follow in 2017, according to the news release.
Excluded companies are U.S. companies Alliant Energy, Empire District Electric, Westar Energy, NRG Energy and Great Plains Energy, as well as international companies Chugoku Electric Power, DMCI Holdings, Electric Power Development, Electricity Generating, Emera, Guangdong Electric Power Development, Hokuriku Electric Power, Inner Mongolia Yitai Coal, Jastrzebska Spolka Weglowa and Tenaga Nasional.
U.S. companies put under investigation are Talen Energy, Southern Co., SCANA, Pinnacle West Capital, OGE Energy and CMS Energy. The other companies under investigation are EDP Energias de Portugal, Endesa, Glow Energy, Kyushu Electric Power and Tohoku Electric Power.