Norway fund, US church cut exposure to fossil fuel investments

The global fossil fuel divestment movement has gained new momentum this past week, with Norwegian financial services giant, Storebrand, electing to exclude 13 coal and 6 oil sands companies from all of its investment portfolios.

The decision, announced last Tuesday, was made by the company – Norway’s second-largest insurer and a leading pension fund in the Scandinavian region – after its latest sustainability analysis of the energy sector.

“The aim of these exclusions is to reduce Storebrand’s exposure to fossil fuels and to secure long term, stable returns for our clients,” said Christine Tørklep Meisingset, the group’s Head of Sustainable Investments.

“If global ambitions to limit global warming to less than 2 degrees Celsius become a reality, many fossil fuel resources will become unburnable and their financial value will be dramatically reduced,” she added. “Exposure to fossil fuels is one of the main sustainability challenges facing business, so for us it is a logical and necessary step to adjust our investments accordingly.”

Storebrand’s decision will see all 13 coal producers in the energy sector (MSCI All Countries index) excluded, as well as the six oil companies with the highest exposure to oil sands, measured by both actual production and reserves. In total, Storebrand excludes 177 companies and 32 countries.

In March, Storebrand was among a group of 41 major institutional investors driving the establishment of an eight-point environmental, social and governance (ESG) disclosure framework for private equity. It has also been pressing oil major Chevron to fully disclose the risks of its controversial Ecuador litigation.

In total Storebrand has excluded 177 companies and 32 countries for breaches of the company’s minimum standard for sustainable investments.

Meanwhile, at roughly the same time last week, a group of American Protestant churches became the first US religious body to vote to divest its pension funds and investments from fossil fuel companies due to climate change concerns.

In a move described by US anti-coal campaigner Bill McKibben as “(maybe) the most important moment yet in the divestment campaign,” the 1.1 million-member United Church of Christ, voted on Monday to divest in stages over the next five years, leaving open the possibility of keeping some fossil fuel investments if companies meet certain standards.

As McKibben also pointed out, the vote both acknowledges the overwhelming scientific evidence about the threat of climate change, and highlights the moral argument: “if it’s wrong to wreck the climate, it’s wrong to profit from the wreckage.”

Or, as United Church funds president Donald Hart put it in a statement: “Implementing the multiple strategies outlined in this resolution will demand time, money and care – but we believe creation deserves no less.” The affiliated group has managed church investments since 1909.