The managers of the world’s largest sovereign wealth fund – run by the Norwegian central bank – have recommended divesting $35 billion in oil stocks. If approved by the Norwegian government, this would be the first time a large equity investor has left the fossil fuel industry altogether.
This massive fund controls about 1.5% of global stocks, and a move like this would send dramatic shockwaves through the fossil fuel industry, specifically oil giants Royal Dutch Shell, ExxonMobil, Chevron, BP and others. Europe has already seen a drop in oil stock prices.
“This is astonishing — as astonishing as the moment when the Rockefellers divested the world’s oldest oil fortune. This is the biggest pile of money on the planet, most of it derived from oil — but that hasn’t blinded its owners to the realities of the world we now inhabit.”
Bill McKibben, 350.org co-founder
The bank sees this move as essential to future-proofing the fund as it becomes increasingly clear that fossil fuel assets will need to be kept in the ground to avert a climate crisis. As the global community invests more resources into clean, 100% renewable energy sources, investments in fossil fuels have become an increasingly short-sighted financial (not to mention immoral) decision.
Just this week at the COP23 talks held in Bonn, Germany, UN Chief Antonio Guterres warned that investments in fossil fuels means “an unsustainable future” and that time is running out to prevent calamitous climate change caused by atmosphere-fouling emissions.
“The fact that one of the world’s biggest sovereign wealth funds of a country that has built its wealth on oil is looking at turning its back on coal, oil and gas companies is a major milestone for the divestment movement and yet another nail in the coffin of the coal, oil and gas industry. To stop climate catastrophe, fossil fuels need to stay in the ground. Investing in them is no longer financially sound, nor morally acceptable, and this proposal is a clear recognition of that.”
Nicolò Wojewoda, 350.org Europe Team Leader
To date, over 800 institutions representing more than $5.4 trillion in assets have committed to some level of divestment. If the Norwegian bank joins this worldwide movement, this incredible divestment would set a new benchmark for global progress towards a Fossil Free world.
A decision from the Norwegian government is expected next year.
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