Oil Rich Norway’s Government Pension Fund Slashes Exposure to… Oil Production
The Fund Says This is Not About Climate Change
Norway’s Government Pension Fund Global, Oslo, will cut its exposure to upstream energy production. The pension fund will cut 50 billion Norwegian kroner ($5.5 billion) in equity allocation from its investment portfolio.
Norges Bank Investment Management, the fund manager, made the announcement.
“The decision to phase out upstream oil and gas companies from the GPFG shall apply to companies classified as ‘Oil: Crude Producers’ by the index provider FTSE Russell,” the Norwegian finance ministry announced Thursday.
These equities comprise “companies engaged in the exploration for and drilling, production, and supply of crude oil on land”.
The decision earned an endorsement from Norway’s Parliament. The decision comes months after the nation’s Ministry of Finance pushed for reductions in oil-price exposure.
“It is reasonable to assume that the market will know which stocks the bank will be selling as part of this phase-out,” said Norway’s central bank governor Oystein Olsen and Yngve Slyngstad, CEO of Norges Bank IM in a letter published this week.
Time to Diversify Needed for the Government Pension Fund Global
Due to market risk, the pension fund received time to properly divest from these positions.
“To give the bank sufficient time to make these changes cost-effectively, however, these companies should not be removed from the investment universe until somewhat later,” Olsen and Slyngstad wrote.
Finally, the fund says its divestment has more to do to oil price risk than it does to climate change.
Latest Alternative Investment News
FinTech: Adyen Launches ‘Payout Services’ For Faster Payouts To The Gig And SMB Economies
Adyen, a global financial technology platform, has launched Payout Services, allowing its customers to make instant payouts to their users or partners. By connecting directly to real-time payment rails, Adyen’s…
Digital Assets: Oracle Red Bull Racing Seeks To Digitize Engagement With Fans On The Sui Blockchain
Oracle Red Bull Racing has announced a multi-year partnership with software company Mysten Labs to collaborate on Sui, which will serve as the team’s Official Blockchain partner. Sui, a Layer…
Venture Capital: Bold, L’Oréal’s Venture Capital Fund, Buys A Stake In Exotic Cosmetic Ingredient Maker Debut
L’Oréal’s (EPA: OR) corporate venture capital fund, BOLD, has announced a minority investment in Debut, a US biotech company specializing in the discovery, formulation, and manufacture of novel ingredients and…
Artificial Intelligence: In Flight Simulation, An AI Drone Tries To Kill Its Own Handler
During a simulated test at a London summit, an AI-controlled drone turned against its human operator, raising significant ethical concerns. Air Force Colonel Tucker “Cinco” Hamilton shared the incident, which…