Norway’s Government Pension Fund Global, the world’s richest sovereign wealth fund, has removed 114 companies from its portfolio
A total of 114 companies have been removed from the portfolio of Norway’ Government Pension Fund Global (GPFG), the world’s richest sovereign fund, because of the risks the companies face from regulatory action on climate change. These include 32 coal mining companies, some of which were linked to deforestation in India and Indonesia, says a report published in The Guardian
“Our risk-based approach means that we exit sectors and areas where we see elevated levels of risk to our investments in the long term,” the report quotes Marthe Skaar, spokeswoman for GPFG.
The US $850 billion worth fund, founded on Norway’s oil and gas wealth, was established by the government in 1990 “as a fiscal policy tool to underpin long-term considerations in the phasing in of petroleum revenues into the Norwegian economy”.
The decision to divest came after the release of GPGF’s first report on responsible investing on Thursday. GPGF, however, did not release the names of the companies or the total amount divested.
Considering that studies have shown only a quarter of known and exploitable fossil fuel resources can be used to keep the rise in global temperature under the internationally accepted danger limit of 2 degrees Celsius, bankers have warned investors that fossil fuel assets might be rendered worthless, says the report.
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