The Norwegian government is recommending that its $1 trillion pension fund divest from some oil and gas companies. It’s a partial step toward completely divesting from the oil and gas sector, which the country’s finance ministry recommended in 2017.
Under the new recommendation, the fund will divest from companies involved solely in exploration and production of oil and gas. Companies that integrate activities, such as retail or renewables, will still remain in the fund’s portfolio.
Sony Kapoor of the think-tank ReDefine—which recommended the Norwegian government fully divest from the sector about a decade ago—called the decision to allow oil majors like Shell, BP, and ExxonMobil to remain in the government fund “unjustifiable.”
Regardless, the stocks of oil majors fell after the news. It’s a “clear market signal about the future of the oil industry,” says Andrew Grant, an oil and gas analyst at the think tank Carbon Tracker.
The government fund will gradually sell approximately $7.5 billion worth of stocks in 134 companies, amounting to 20% of all oil and gas company stocks that the Norwegian fund currently holds.
“The oil industry will be an important and major industry in Norway for many years to come. Therefore this measure is about diversification,” the government said in its announcement. “It is anticipated that almost all of the growth in listed renewable energy over the next decade will be driven by companies that do not have renewable energy as their main business. The Fund should be able to participate in this growth.”
The diversification makes sense. About 20% of Norway’s revenues come from exporting oil and gas extracted from the Norwegian continental shelf. Many environmentalists argue, however, that divesting from fossil fuel companies is one of many necessary steps in climate action needed to cut emissions quickly.
The following is the list of 134 companies that are likely to be affected by the Norwegian government’s proposal, which were previously reported by Financial Times’s David Sheppard.