The Norwegian Oil Fund continues to investment in the world’s most polluting industry
A new report, Norway’s Coal Secret: The Norwegian Oil Fund’s Continued Investments in the World’s Most Polluting Industry, by the Nordic sustainable finance team at ActionAid Denmark uncovers the Oil Fund’s investments totaling more than $9.1 billion USD (89,1 billion NOK) across 71 companies operating in the coal industry. 46% of the investments are spread across 29 companies that are planning to expand their coal operations. The expansion plans of the companies would lead to the emission of 127 million tons of CO2 every year – nearly 2.5 times the size of Norway’s annual domestic emissions.
During COP26, Norway’s Prime Minister stated about the Oil Fund that “Our goal is to make it the leading fund in responsible investment and the management of climate risk”. This aim was echoed in the Fund’s 2022 Climate Action Plan and by its CEO, Nicolai Tangen on multiple occasions. The Fund has also stated the intention to exit coal since 2015 and the fund’s Chief Governance and Compliance Officer was quoted by Norwegian finance media saying “we have sold out of coal”. Despite this, the Fund still has tens of billions of NOK invested in the polluting industry, making it Europe’s largest institutional investor in coal.
The fund has a coal policy which restricts it from investing in coal mining and power companies of a certain size. The Norwegian Parliament first introduced relative coal exclusion criteria for the Fund in 2015, which was later strengthened in 2019 to include absolute thresholds. However, there are three major gaps in the policy, allowing investments in a wide range of coal companies:
- The current relative and absolute thresholds are far too high. Whilst the coal criteria were good at the time that they were implemented, they have not been updated to keep up with frontrunners in the financial sector.
- It does not include a criterion for companies that are involved in the development of new coal mines, power plants and related infrastructure.
- The policy only covers mining and power production companies, not companies that provide coal infrastructure.
Action Aid Denmark and the co-publishers’ urgewald, Oil Change International, Greenpeace, Norwegian Forum for Development and Environment and Future in Our Hands are calling on Norway to require the Oil Fund to lower both its relative and absolute thresholds on a company’s coal capacity. Further, the Oil Fund needs to exclude all companies with coal expansion plans and commit to phasing out its exposure to the entire coal value chain (mining, power & infrastructure).
Results and recommendations have been shared with all political parties in Norway to inform the yearly review of the Oil Fund’s conducted by the elected officials in Parliament which has just begun.
“Despite ambitions to be a climate leader and telling the public it is out of coal, the Norwegian Oil Fund is financing new climate wrecking coal projects like mines and coal power plants around the world. An especially grim example of this is a highly disputed coal power plant in Vietnam, that could lead to the death of more than 1800 people. The Norwegian parliament must impose on the Oil Fund to divest from the world’s dirtiest industry”.
– Dina Rui, advisor on Nordic sustainable finance at ActionAid Denmark
“In 2016, the Oil Fund heard civil society’s call and became a leader on coal divestment, but today it lags behind. Since 2016, over 75 large financial institutions banned coal developers from their portfolios and announced firm dates for a complete phase-out of coal investments. The Oil Fund failed to take such measures and is now Europe’s largest investor in the coal industry. The Fund must become coal-free before our chance to limit global warming to 1.5°C slips away.”
– Heffa Schücking, the director of the German environmental group Urgewald
“Barely a month ago, the UNFCCC issued a final warning. If the world is to avoid the worst consequences of the climate crisis and stay below a 1.5 degree temperature increase, we need to act now. It makes no sense that the Oil Fund continues to be one of the largest investors in coal, the biggest climate threat. We expect that Jonas Gahr Støre listens to our recommendations, so that all coal companies are thrown out of the fund.”
– Frode Pleym, Head of Greenpeace Norway
“This report shows how the Oil Fund’s is continuing its dirty coal investments, despite of all of the promises that the Oil Fund is out of coal. If we are to reach the goals set by the Paris Agreement, we need to stop financing new oil, gas and coal. It is insane that Norway is now Europe’s biggest institutional coal investor. The Parliament needs to clean this up.”
– Silje Ask Lundberg, Senior Advisor, Oil Change International
“Leading investors who are serious about climate already have zero tolerance for coal. The billions that the Oil Fund has invested in coal means that we are betting on not reaching the climate targets. If not, it would not be profitable. The Oil Fund has to go to the companies still investing in coal and demand that they change their plans. Almost half of the coal companies that the Oil Fund is invested in have plans to expand their coal assets. We almost cannot believe that the Oil Fund would sit by and watch this. The expansion plans alone would lead to CO2 emissions that are 2,5 times that of Norway’s domestic emissions. It is crucial that Jonas Gahr Støre takes urgent action to change this.”
– Anja Bakken Riise, Executive Director, Future is in Our Hands