For full statement on Norges Bank website:
Some selected news coverage
Norway’s wealth fund “is clearly indicating that this is a completely new ball game,” said Sasja Beslik, head of group sustainable finance, which is part of an asset management unit at Nordea Bank AB that oversees about $250 billion. “This is a seminal moment”…“This is a revolutionary thing,” Beslik at Nordea said. “They’re setting the bar for so many other institutional investors, not just in the Nordic region but around the world.” He estimates that in about 10 years from now, oil and gas will shrink to about a third their current presence in most portfolios. The assets will also “diminish substantially” in global stock indexes, he said.
The chief executive officer of Storebrand Asset Management, Jan Erik Saugestad, says an exit by Norway’s wealth fund “will place greater responsibility on the rest of the investment community.” Storebrand manages over $80 billion in assets.
Tobias Fransson, head of strategy & sustainability at the Fourth Swedish National Pension Fund, which oversees more than $40 billion, calls Norway’s sovereign wealth fund a “thought leader,” and says “it’s natural” everyone’s watching.
“The energy sector hasn’t been particularly interesting this year as an investment,” said Annika Ekman, head of direct equity investments at Ilmarinen Mutual Pension Insurance Co. “Globally, it’s also been one of the weakest performers this year.”
The deputy central bank chief supervising the fund said if approved the proposal would mean cutting its investments in oil and gas companies which currently represent 6 percent – or around $37 billion – of its benchmark equity index.
At the end of 2016, the fund held stakes of 2.3 percent in Royal Dutch Shell, 1.7 percent of BP, 0.9 percent of Chevron and 0.8 percent of Exxon Mobil . It also held stakes in Italy’s Eni, France’s Total and Sweden’s Lundin Petroleum.
Europe’s oil and gas index was down 0.35 percent by 1332 GMT.
The Norges Bank recommendation that the Norwegian Fund remove oil and gas stocks from its benchmark indexes reflects the long-term deterioration of these stocks,” said Tom Sanzillo, Director of Finance for IEEFA. “The Norges Bank recommendation that the Norwegian Fund remove oil and gas stocks from its benchmark indexes reflects the long-term deterioration of these stocks. Oil and gas stocks are no longer stable providers of cash or value added contributors to institutional investment funds. The Bank’s decision now incorporates the risks from these increasingly speculative investments into the management of the Norwegian Fund…The Norges Bank, Finance Ministry and the Parliament have now come to understand that Norway faces severe fiscal stress from long term low oil prices. This decision gives them a fighting chance to avoid going down with the sinking fortunes of the oil and gas industry.”
Mark Campanale, founder and executive director at think tank Carbon Tracker: “The energy sector is undergoing a fundamental transition, as the world switches to local carbon sources for power and transport,” he said. “An economy such as Norway, heavily dependent on oil revenues to underpin its sovereign wealth fund, is to be congratulated for taking a timely and foresighted approach to managing its transition risk exposure. Diversifying away now from fossil fuels, including oil and gas which faces an uncertain future, reduces the concentration risks in its investment portfolio whilst allowing it exposure to renewables which is one of the fastest growing business sectors in the world.”
