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Norwegian pension fund pulls back from Canada’s oil sands
GLOBAL
NORWAY’S largest pension fund, Kommunal Landspensjonskasse (KLP), has dropped four more Canadian energy firms from the list of companies it invests in. The move comes as the fund, which administers over US$81bn in assets, has said it will no longer invest in companies that derive more than 5% of their revenue from Can- ada’s oil sands. This is down from 30% previously and matches KLP’s limit for coal investments. KLP said it had sold $58mn worth of stocks and bonds as a result of this reduction.
The news is the latest blow to the oil sands, which have been hit hard by a combination of low crude prices and mounting environmental concerns.
KLP’s move has affected Cenovus Energy, Suncor Energy, Imperial Oil and Husky Energy, which will now be excluded from investment consideration along with Russia’s Tatneft.
KLP described its pullback from the oil sands as “great news” for customers because the indus- try is not aligned with the 2 Celsius global warm- ing target under the Paris climate agreement.
“By going coal and oil sands free, we are send- ing a strong message on the urgency of shifting from fossil to renewable energy,” said KLP’s CEO, Sverre Thornes, in a statement.
KLP’s head of responsible investment, Jeanett Bergan, told Reuters last week that the decision to exclude oil sands was a logical extension of the fund’s exit from coal.
“It’s hard to treat oil sands differently [from] coal, because of the similar environmental effects in the extraction, and we decided to treat these fossil fuel products equally,” Bergan said.
KLP’s pullback comes after Norway’s sover- eign wealth fund announced in March that it would reduce its holdings in oil stocks, including some Canadian firms, as it sought to diversify its investments. The reduction was not as far-reach- ing as the industry had feared, but was consid- ered a symbolic blow for oil and gas.
The Canadian Association of Petroleum Pro- ducers’ president and CEO, Tim McMillan, said attempts to stifle the country’s production by restricting financing would result in countries with lower environmental standards meeting global demand instead.
McMillan said Canadian oil and natural gas producers “operate under one of the most stringent regulatory systems in the world”. He added that oil and gas were still anticipated to be needed for decades to come to meet the world’s energy requirements.
“Canada can make the world a better place by providing reliable, affordable and responsi- bly produced energy that will help raise stand- ards of living around the world,” McMillan told the Canadian Press in an email. “We can do this while reducing net global greenhouse gas [GHG] emissions, and developing world-lead- ing environmental technology and expertise.”™
KLP’s pullback comes after Norway’s sovereign wealth fund announced in March that it would reduce its holdings in oil stocks.
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