The world’s biggest state-owned wealth fund divests from oil - here’s how it happened
Like a smoker trying to quit, getting a country to divest from fossil fuels can either be a stubborn battle or a long, slow, eventual win. Luckily, there has been a sustained trend by institutional entities to divest from oil.
In November 2017, a ground breaking case shook the international finance market: Norway’s Sovereign Wealth Fund, the biggest state-owned investment fund in the world, announced its plan to sell all of its shares in oil and gas companies. Part of Norway’s Sovereign Wealth Fund, the Government Pension Fund Global invests globally in international equities, fixed income and real estate.
Martin Norman, Head of the Sustainable Finance Campaign at Greenpeace Nordic and Hilal Atici, Global Campaign Strategist at Greenpeace International tell us the story of a long campaign against fossil fuels in a country that heavily relies on oil.
When did you start campaigning to get the fund to divest from fossil fuels?
Martin: In 2013 we teamed up with WWF, the Norwegian NGO Future in our Hands and the German NGO urgewald. Together we pushed for Norway’s Sovereign Wealth Fund, the Oil Fund, to divest from coal.
We managed to get a coal divestment decision in May 2015. The parliament made an unanimous decision to divest from coal using a 30% criteria. After the coal win, we had our first meeting with the other NGOs. It was here that we said: “Let’s have a fossil fuels free fund by 2020!”
In 2015 the Fund divested from coal. How was the work of shifting from coal to oil divestment?
Hilal: Getting the Oil Fund that was built on oil money to free itself from oil, was a more difficult mental exercise. We really had to find the right rationale for the divestment.
As we talked to people we realised that, despite the challenges, we could make it happen. But it would take time.
Martin: Norway is heavily invested in oil, the whole economy relies on it. This kind of overexposure in finance is absurd, and we realised there hadn’t been much discussion around it. So we commissioned some leading Norwegian analysts to write a report and expose how wasteful and unsustainable this is.
We launched the report in March last year, with purely financial arguments. That led to a group of key financial experts saying this was absolutely true. Then, out of the blue, the board of the Norwegian State Bank asked for permission to sell all their assets in coal and oil, based on our arguments.
How is all this work currently creating a “divestment domino effect”?
Martin: Investors already know that oil prices are volatile and that, day after day, renewables look better than fossil fuels. But there’s something else. These people move like lemmings, you see that through history. So when the Norwegian Oil Fund does, and the New York State Fund does too, things start happening very faster.
What do you hope for the future and what will you be working in to achieve it?
Martin: From my side, it is crucial to ensure we get a fossil fuels free Oil Fund. Right now, everything seems to be moving that way. There is of course opposition, but the financial overexposure arguments are really strong.
Hilal: Around coal the real battle right now is in Asia. There are a lot of coal plants being opened, a lot of mines. Let’s not think that coal is dead and that renewables have taken over. Coal is still a big threat and we need to keep pushing.
But if everyone puts pressure on their pension funds, banks or insurance companies to take people’s money out of fossil fuels, big money would feel huge pressure. They would definitely shift.
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The interview was prepared by Cecilia Calello, Campaign Operations Manager at Greenpeace International.
