Last week, CIEL submitted a letter to an expert group that is tasked with evaluating whether Norway’s sovereign wealth fund, the Government Pension Fund Global, should divest from companies engaged in the fossil fuel industry. At the end of November, the expert group will present its divestment recommendations.
If Norway decides to divest, it will be a formidable move towards the work we (and 400,000+ others) do to ensure the world stays below 2 degrees of warming. Norway’s divestment would tip the scales from the $50 billion already pledged for fossil fuel divestment to almost $ 1 trillion. This is because Norway’s Fund owns 1.3% of the world’s stocks and is worth approximately $880 billion. The global financial heft of the Fund would not only provide the usual benefits of divestment – revealed preferences for low carbon economy and avoided reputational harm – but it could also change market signals that presently drive fossil fuel investments and thus would be a powerful step towards reduced global carbon emissions.
In April 2014, Norway’s Ministry of Finance stated that the Fund is not a policy tool – however, we believe that the decision to continue to invest in the fossil fuel industry is a de facto policy decision to support the industry that drives climate change. Continued fossil fuel investment is a revealed preference that fails to align with Norway’s national and international obligations to mitigate carbon emissions and ensure a safe climate for future generations.
Under the United Nations Framework Convention on Climate Change, Norway has an obligation to lead in a global transition to a low-carbon economy. And while Norway has been deeply engaged in efforts to reduce emissions in the forest sector globally, for the sake of our climate and our future generations, Norway should step up to move the divestment movement rapidly forward.
Originally posted on October 16, 2014.