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Norway’s KLP pension fund excludes $3.7 billion in coal-related investments

Kommunal Landspensjonskasse, Oslo, excluded 32 billion Norwegian kroner ($3.7 billion) from equity and bond investments in 46 companies involved in coal-based activities, the Norwegian pension fund said in a news release Wednesday.

The exclusions were effective April 12. KLP said current global emission reduction efforts are not sufficient and are leading to global warming of 3 degrees Celsius, citing a 2017 study by International Energy Agency.

KLP said exclusion of coal companies and companies involved in coal-based activities will "have no, or at best, a minor effect on the world's greenhouse gases emissions." However, "when investors like KLP choose to divest from coal, it sends an important signal on future financing of such projects and is an incentive for companies to seek other sources of income than coal-based activities," the 699 billion kroner KLP said.

KLP also changed the investment criteria for companies with coal exposure. KLP already excludes companies that are involved in coal-based activities through coal mining and energy generation from coal. But the pension company has added three new criteria to identify companies that are yet to be excluded. According to the policy, KLP will exclude companies that derive more than 5% of their revenues from coal-based activities, companies with coal production exceeding 20 million tons annually and companies with more than 10,000 megawatt production capacity.

KLP has tightened its limits twice before. In 2014, KLP's board of directors decided that companies in which it invests that derive more than 50% of their revenues from coal-based activities should be excluded. That limit was reduced to 30% of revenues in 2017.

A KLP spokesman could not be reached to provide additional details.