Norway raked in money from oil in the past. But now the country’s Norges Bank, which manages its $1 trillion sovereign wealth fund – the world’s largest – is recommending the government dump fossil fuel stocks. They said the move “will make the government’s wealth less vulnerable to a permanent drop in oil and gas prices.” According to Bloomberg, this could mean unloading $35 billion in stocks – and European oil stocks plummeted after the proposal.
The movement for fossil fuel divestment appears to be gaining speed. Norway could get rid of their shares of big oil companies like ExxonMobil and Royal Dutch Shell. 350.org’s Bill McKibben said the proposal was “as astonishing as the moment when the Rockefellers divested the world’s oldest oil fortune.” Norway’s fund controls around 1.5 percent of global stocks, according to Bloomberg.
Norges Bank recommended the move in a letter to the Ministry of Finance, but the government probably won’t make its final decision until next year. They said the idea requires a thorough assessment. The move could include divesting from current shares, and not investing in oil and gas in the future. Bloomberg said the fund has already sold most of its coal stocks.
While environmental activists have praised the proposal, Bloomberg said it’s more about hedging risk than combating climate change. Norges Bank deputy governor Egil Matsen said in their statement the advice is based on financial arguments, and doesn’t reflect a certain view of the “profitability or sustainability of the oil and gas sector.” Rystad Energy senior partner Per Magnus Nysveen said “this has nothing to do with the environment.” But according to Mindy Lubber, president of nonprofit Ceres, if Norway takes the significant step, others will follow – which could ultimately be a good move for the planet.