By Anders Lorenzen
Further to its divestment from 19 coal and oil sand companies last year, the Norwegian company Storebrand, one of the largest investors operating in Norway and Sweden, has this year excluded ten new coal companies from its portfolio. The total list of companies that excluded by Storebrand on the grounds of environmental degradation now tallies 46.
Storebrand, which is also one of the largest pension fund providers in Norway, has been concentrating on sustainable investments since as early as the 1990s. The company has 470 billion Norwegian kroner (NOK) invested in 2500 companies worldwide, 2400 of which have already been given a sustainability rating on a scale of 0-100. The highest rated companies qualify for membership of their flagship sustainability fund ‘Storebrand Trippel Smart’, and those rated lowest are at risk of exclusion by the Storebrand investor committee, as has happened with many with a high reliance on coal and tar sands.
Strong opposition to investment in the tar sands
The company has also been active opposing tar sands; Storebrand owns a 0.4% share in the Norwegian oil and gas company Statoil, which is a Norwegian state owned company. Five years ago, Statoil became an investor in the tar sands oil project in Alberta, Canada, seen by many as the most destructive fossil fuel project on the planet. Storebrand has always disagreed with Statoil’s tar sands investments, and has voted for a stakeholder meeting motion tabled by the environmental groups Greenpeace and WWF, requesting that Statoil withdraw from the project.
|Storebrand’s Head of Sustainable Investements Christine Torklep Meisingset. Photo credit: Storebrand.
When we met recently in Oslo, Head of Sustainable Investments at Storebrand, Christine Torklep Meisingset, told me that Storebrand continues to have an ongoing dialogue with Statoil on the tar sands issue. She explained that divesting from tar sands altogether would necessitate divestment from most of the oil and gas industry as most players in the global oil and gas market have some investments in tar sands. Furthermore, she said, Statoil is one of the lesser investors (number 17 to be exact) one of the major companies investing in tar sands. she insisted that Storebrand will continue to press Statoil and other companies on the issue, encouraging more local investment. In her words ‘’We concentrate our active ownership in the Nordic region, where we have a stronger position’’.
In a recent meeting with Greenpeace Norway oil campaigner, Martin Norman, he told me that this was a position he agreed with as Statoil were one of the last oil majors to become involved in tar sands and therefore it would be easier for them to pull out of it. He urged concerned Statoil investors to attend Statoil future AGMs to oppose the company’s investments in tar sands.
Fossil fuel divestment requires more credible alternatives
Meisingset was clear that although Storebrand still has some holdings in tar sands, coal oil and gas, the company is taking gradual steps to fully divest from fossil fuels but this will take some time due to the complexity of the industries. She explains that a key challenge is the lack of a real investment alternative to fossil fuel companies; unfortunately there is as yet a lack of credible renewable energy companies to invest in. In her own words, “We are investing more in the best performers and less in the most risky companies. Divesting from the coal industry means we switch to companies with a lower exposure to fossil fuels, such as gas and also those who have a larger renewables portfolio’. One of the reasons we have to be careful how we go about this is due to our responsibility to our clients. We have to shift our investments gradually in order to secure returns”
Fossil fuels in our pensions: a global challenge
A majority of the world’s pension funds invest heavily in fossil fuels. The UK based NGO Carbon Tracker has warned about the concept of ‘stranded assets’ and the risks associated with pension funds if fund managers don’t start to divert their investments into safer and more
sustainable investments. When we discussed this, Meisingset was adamant that the risks of the carbon bubble bursting had definitely contributed to Storebrand’s decision to exclude fossil fuel companies with the highest carbon footprint from its expanding portfolio.
Sub edited by Kirstie Wielandt