Norway Goes Big on Fossil Fuel Divestment... Now Who's Next?
As world's largest sovereign wealth fund aims to break free of coal, campaigners call it a step in the right direction and a signal to leaders across the globe.
In a move that climate justice campaigners are heralding as a challenge to other powerful decision-makers and investors around the world, the Norwegian parliament on Friday approved a measure calling for the Norwegian Government Pension Fund—the largest sovereign wealth fund in the world with holdings of approximately $890 billion—to begin divesting from companies heavily involved with the mining, transportation, or burning of coal.
"The way this idea—that the world has far more fossil fuel than it can burn—has spread is an enormously hopeful sign. There’s much work to be done taking on coal, oil, and gas but the momentum is definitely on our side."
—Bill McKibben, 350.orgWith a global fossil fuel divestment campaign just a few years old, the move by parliament will make Norway's financial withdrawal from the industry the single largest of its kind.
The new law will mean the the pension fund will be forbidden from investing in any company that relies on coal for more than 30 percent of its income. As Damian Carrington reports for the Guardian, that is likely to end up "affecting 122 companies across the world" and financial analyses have estimated that it could ultimately affect approximately $8 billion of the fund’s current investments. The process of divesting from the companies who meet the threshold will begin next year, though the applause over the move began immediately.
"With Norway’s decision, coal divestment has gone mainstream highlighting both the moral imperative and financial case for divestment," said Nicolo Wojewoda, head of 350.org’s European team, which led the campaign in Norway. "Other institutions are left with no excuse to not follow suit. Coal is on its last leg; with king coal falling from its throne, we are all more inspired to go after big oil and gas."
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Johan Hammerstrøm, communication director for Greenpeace Nordic, met the vote by calling the vote in Norway a "historic decision" with potentially far-reaching implications.
"It is the first time in history that all our politicians — left-leaning and right-leaning — have come together to take a stand against coal," said Hammerstrøm. "The parliament unanimously voted for the Norwegian Government Pension Fund to classify most companies involved in coal mining and coal-fired utilities as unacceptable investment options. Not only is this a unique achievement, it is a step in the right direction and a signal to leaders across the globe. The Government Pension Fund is the world’s largest wealth fund not privately owned and the new measures means that according to Greenpeace Nordic’s and Urgewald’s initial estimate, 120 companies will be targeted for a divestment totaling 8 billion US dollars."
The final approval has been anticipated since a parliamentary panel recommended the move last week, but divestment activists from around the world who kept the pressure on Norwegian politicians throughout the process say it is nearly unbelievable that Norway's divestment from fossil fuels—though neither total nor perfect—has come to pass.
"If you’d told any of us, three years ago, that the planet’s largest sovereign wealth fund would begin divesting, we would have laughed," said 350.org co-founder Bill McKibben. "The way this idea—that the world has far more fossil fuel than it can burn—has spread is an enormously hopeful sign. There’s much work to be done taking on coal, oil, and gas but the momentum is definitely on our side."
"Other institutions are left with no excuse to not follow suit. Coal is on its last leg; with king coal falling from its throne, we are all more inspired to go after big oil and gas."
—Nicolo Wojewoda, 350.org
The coalition of civil society organizations who campaigned hardest in Norway hailed the decision as a critical first step away from fossil fuels by one of the world’s most oil-dependent economies. However, they promised to continue their fight and renewed their call for the fund to divest fully from all fossil fuels interests while shifting its money to new investments in renewable energy.
“Divestment from coal must be the first step for Norway, not the last," said Greenpeace, World Wildlife Fund, Future in Our Hands, 350.org, and Norwegian-based group Urgewald in a joint statement. "We will campaign for the fund to invest at least 5% of its value in renewables, particularly in emerging economies, and for full divestment from all fossil fuels. For Norway itself, our goal is a just transition out of oil and gas and into the green jobs of the future. We are rapidly approaching the time when no country can rely on fossil fuels for its economy or energy safety."
With the divestment movement and the call for various institutions to move their money away from fossil fuels often derided as merely "symbolic," supporters of the movement have made it clear that the tactic itself goes well beyond the acute financial impact any one investment (or divestment) could possibly have.
As Bob Massie, a longtime climate activist and a founder of the Investor Network on Climate Risk, told the New York Times on Friday, a divestment decision like Norway's "lays the groundwork for the transformation of cultural and political views in a major topic that people would rather avoid. This requires people to say, 'What are we going to do? What are our choices? What do we believe in?'"
He added, "There’s a mysterious process by which an 'unthinkable, ridiculous' proposition becomes 'possible.'"