Double whammy as the world’s largest wealth fund blacklists some canadian companies for “excessive” carbon emissions and World Economic Forum rates canada #28 in preparedness for climate change

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Norway’s $1 trillion wealth fund is excluding some of the world’s biggest commodities firms from its portfolio for their use and production of coal, including Glencore and Anglo American.

Underlining the growing role of climate considerations for long-term investors, the fund is also excluding German utility RWE, South African petrochemicals firm Sasol and Dutch company AGL Energy over their use of coal.

Norway’s parliament agreed in June 2019 to toughen existing limits on coal investments by the world’s largest wealth fund by excluding companies that mined more than 20 million tonnes of coal a year or generated more than 10 gigawatts of power from coal.

The fund held stocks worth $1.6-billion in such companies at the end of 2019, according to fund data. Wednesday’s announcement is the first to show the tougher rules being applied.

The fund, set up in 1996 to save Norway’s oil revenues for future generations, now holds about 1.5% of globally listed shares and its decisions are often followed by other investors. It sells holdings before announcing any exclusions to avoid excessive market moves.

The fund put another set of companies – BHP, Uniper, Enel and Vistra Energy – under observation for possible exclusion later if they did not address their use or production of coal.

The value of holdings in this group stood at $3.9 billion at the end of last year.

“This is good news that the biggest producers of coal in absolute terms are finally out of the fund,” Else Hendel, acting environmental policy leader at green group WWF Norway, told Reuters.

EXCESSIVE EMISSIONS
The fund, which operates under ethical guidelines set by parliament, also said it was excluding four Canadian oil companies for producing excessive greenhouse gas emissions, the first time it has used that reason to blacklist firms.

Canadian Natural Resources, Cenovus Energy, Suncor Energy and Imperial Oil were excluded for “acts or omissions that on an aggregate company level lead to unacceptable greenhouse gas emissions,” it said.

The fund held stock worth $1.15 billion in these companies at the end of 2019.

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Canada lacks consistent movement on transitioning to a more secure, sustainable and affordable energy future and must ratchet up energy-efficiency targets and reduce emissions, according to a new World Economic Forum report.

Canada ranked 28th in the annual global scorecard, which in part examines how prepared countries are to combat climate change.

The report was published Wednesday, a day after the world’s largest wealth fund blacklisted four Canadian oil sands companies for “acts or omissions that on an aggregate company level lead to unacceptable greenhouse-gas emissions.” The companies are Canadian Natural Resources Ltd. (CNRL), Cenovus Energy Inc., Suncor Energy Inc. and Imperial Oil Ltd.

The move marked the first time that Norway’s US$1-trillion wealth fund, which operates under ethical guidelines set by the country’s parliament, used excessive greenhouse-gas emissions as a reason to divest.

Alberta Energy Minister Sonya Savage called the decision “poorly informed and highly hypocritical.”

Canada’s per capita greenhouse-gas emissions certainly played a part in its placement behind a swath of Scandinavian and European countries in the World Economic Forum’s global energy-transition rankings.

Statistics: Posted by StatsGuy — May 14th, 2020 11:55 am


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