Today, Norway’s $870bn wealth fund announced the findings of a government commission review of its coal, oil and gas investments. The press release can be found here, but the headline conclusion of this enquiry was that the fund should strengthen its active ownership to identify those worst climate offenders on a case by case basis.
Carbon Tracker presents the following comment in response:
“The report recognises that stranded assets can be material for investors. The recommendation is that this is dealt with through active ownership and improved reporting on managing climate risk – an approach we hope will deliver meaningful results if considered alongside climate constraints. We look forward to seeing how the Fund demonstrates it is diverting capital expenditure away from expanding fossil fuel use, thereby avoiding stranded assets” – James Leaton, Research Director, Carbon Tracker
Jeremy Leggett, non-executive Chairman, Carbon Tracker, says:
“One of the world’s largest and most influential investors announces today that “Fossil fuel companies face the prospect of decline” due to climate risk. In this respect this statement, just as Lima COP is meeting, is highly significant. Now is the time for the owners of these corporations to review their investments, plan for a rapid transition to a low carbon future and map the fossil fuel industry’s orderly wind-down to avoid breaching the 2 degrees warming ceiling.”
Mark Campanale, Founder and Executive Director, Carbon Tracker, says:
“Carbon Tracker welcomes the commitment of the Fund to engage with regulators and standard setters on climate and we look forward to working with them and other institutional investors committed to the best standards of transparency and disclosure over climate risk. However there is a risk that unless this is tied to a clear benchmark linked to both capital discipline and the 2º degrees climate budget it will achieve little in practice and be an excuse for little or no concrete action”.