Norway fund may have to offload $1 billion stake in Glencore in shift outside of coal

OSLO (Reuters) – Norway’s $1 trillion sovereign wealth fund might have to sell a $1 billion stake in commodities firm Glencore and various other investments in order to reach tighter ethical investing rules adopted by its parliament.

Norway’s parliament agreed on Wednesday in the center-right government’s plan that world’s largest fund would not invest in firms that mine beyond 20 million tonnes of coal annually or generate a lot more than 10 gigawatts (GW) of power from coal.

Environmental campaigners Greenpeace and Urgewald said the ultra-modern rules mean the fund it is fair to divest its 2.03% stake in Glencore, worth $1 billion right after 2019 according to fund data.

The fund would also need to sell its 2.16% holding in miner Anglo American, worth $620 million, they added, citing their own individual analysis.

The fund, Glencore and Anglo American all declined to comment.

“What this may do … is supply a very clear signal to both governments and companies that the here we are at financing classic fuels is coming to an end, for the advantage both people and planet,” said Martin Norman, Sustainable Finance Campaigner at Greenpeace in Norway.

(graphic: tmsnrt.rs/2tskfub)

Other divestments have the fund’s 1.39% stake in Germany’s RWE worth $186 million, its 2.22% holding in Australia’s South32 worth $266 million additionally, the 1.03% it owns in Germany’s Uniper as well as others, the green campaigners said.

The original rules on making an investment in coal, also set by parliament, insight on suggested the fund to not ever invest in a company that derived even more than 30 percent of the company’s revenues from coal.

That led the fund in selling its stakes in 83 mostly coal-producing companies, for instance Peabody Energy and Coal India, and in addition power producers cover anything from Portland Kenmore to Korea Electrical energy.

It was the main major fund to do and those divestments in 2019 prompted other long-term investors align similar guidelines, including German insurer Allianz later that year.

Uniper said its generation capacity globally was as low as one third coal-based, adding that this aims to utilize more low-carbon fuels collectively already cut its laser emissions by some 20% since 2019.

“We come across ourselves as partners from the energy transition need to accompany it constructively,” a Uniper spokeswoman said.

RWE said its transformation plan includes not building any new coal-fired power plants, it added that it’ll invest nearly 1.5 billion euros ($1.70 billion) annually in new electricity projects once its transaction with EON is carried out.

“By the end of 2019, more than 60% of RWE’s plants definately will supply electricity with not much CO2 emissions,” a spokeswoman said.

South32 and BHP Billiton declined to comment while Enel don’t reply to a acquire comment.