Norway’s Parliament has agreed that their sovereign energy fund should divest from investments in coal in an attempt to mitigate climate change.

Image via Resources Roots.

The Government Pension Fund of Norway is a fund into which the surplus wealth produced by Norwegian petroleum income is deposited. It is the largest equity fund in the world, amounting about 1% of total global equity markets. The fund is managed by Norges Bank Investment Management, under directives from the Advisory Council on Ethics. They have forfeited doing business with several major companies (including the likes of Boeing or BAT) because of unethical behaviors. Now, they want to move away from what they consider to be a most unethical industry – coal – in order to limit the effects of climate change.

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“Investing in coal companies poses both a climate risk and a future economic risk,” the parties said in a joint statement. “Coal is in a class by itself as the source with the greatest responsibility for greenhouse gas emissions, so this is a great victory in the battle against climate change,” opposition Labour MP Torstein Tvedt Solberg added.

Naturally, the fact that such a big player divests from coal is a major change, and an indicator that more problems are on their way for the coal industry. Just recently, HSBC announced their partners to be careful when investing in fossil fuels. Stanford University pledged in May 2014 that its $18.7 billion endowment would no longer be used to invest in coal, and more and more funds are following suite.

For Norway, whose coal holdings come at about $11 billion, this is a bold move, and one that we applaud.