While some are calling for Norway to divest itself of foreign coal companies to reduce global warming, there's a wrinkle: Norway is itself a major coal producer.
Norway, as the owner of an $800 billion sovereign wealth fund – the world’s largest – has made great efforts over the years to be an ethical investor. But it’s not always been easy.
The most recent reminder came last week when politicians in Norway called for the Government Pension Fund, which is based on excess petroleum revenues, to pull out of coal company investments abroad – a conundrum given that the country itself produces coal via a Norwegian state-owned company up in the northern territory of Svalbard.
Norway’s finance ministry, which oversees the pension fund, announced Monday it would consider recommendations from a strategy council to improve its responsible investment practices.
This is not the first time the fund has found itself in an ethical dilemma.
Since 2005, the fund has excluded investments in Lockheed Martin for producing nuclear weapon components, yet the country purchases its planes. The fund currently excludes a total of 60 companies from investments over human rights violations, gross corruption, severe environmental damage, and production of tobacco, palm oil, and certain weapons.
A coal pullout would put at stake investments representing 1 percent of the fund in large companies such as BHP Billiton, Xstrata, and Anglo American. Such a move would be a natural follow-up to the decision by the Nordic prime ministers’ September meeting in Stockholm with US President Barack Obama to stop the financing of international coal projects, said Jonas Gahr Store, a Labor party representative behind the initiative.