The Norwegian Sovereign Wealth Fund has sold $3 billion worth of energy stocks and other companies it finds are seriously harming the environment. Most of the stocks it sold in the energy sector are for Canadian companies involved in producing and distributing oil derived from the Alberta tar sands. According to the CBC, Norges Bank Investment Management, which manages Norway’s sovereign wealth fund, announced on Wednesday it would stop investing in Calgary-based Canadian Natural Resources, Cenovus Energy, Suncor Energy, and Imperial Oil after concluding they produce unacceptable levels of greenhouse gas emissions.
The decision was based on recommendations from the Council on Ethics, the fund’s ethics watchdog, because of the companies’ carbon emissions from production of oil, the central bank said. Four years ago, the fund decided to make carbon emissions one of the criterion for exclusion from its investment strategy, which is interesting since the fund itself was set up specifically to preserve the profits from Norwegian oil operations for the benefit of its citizens. In 2017, the Council on Ethics recommended “a small handful” of oil, cement, and steel companies be blacklisted because they producing too many greenhouse gas emissions.
In addition to the 4 Canadian oil companies, the Sovereign Wealth Fund excluded three other companies because of the severe environmental damage attributable to their operations. — Egypt’s ElSewedy Electric Co, Brazilian iron ore miner Vale SA , and Brazilian power holding Eletrobras.
Getting rid of the shares of the 7 companies at this time wasn’t an easy task, given the market turmoil caused by the coronavirus and the plunging price of crude oil. Apparently, there weren’t all that many buyers begging to acquire the shares of those companies.
Trudeau: We Have To Adjust
Canadian Prime Minister Justin Trudeau said during a press conference after the announcement, “We’ve seen investors around the world looking at the risks associated with climate change as an integral part of investment decisions they make. That is why it is so important for Canada to continue to move forward on fighting climate change and reduce our emissions in all sectors. I can highlight that many companies in the energy sector have understood that the investment climate is shifting and there is a need for clear leadership and clear targets to reach on fighting climate change to draw on global capital.” Buying an oil pipeline that Canada doesn’t want and can’t use may not be an example of such clear leadership, but we can’t expect national leaders to be perfect.
Alberta Reacts With Scorn
Alberta, which has built its entire economy on delivering the dirtiest energy on Earth to the rest of the world, was shocked and outraged by the announcement. Its energy minister called the boycott “poorly informed and highly hypocritical.” Sonya Savage, a member of the Alberta legislature, issued a statement saying, “Canada’s energy producers have some of the highest environmental, social and governance standards in the world. A recent review of these standards put Canada — driven by Alberta’s energy sector — third behind only Norway and Denmark. When looking at the top ten oil exporting nations Canada ranks first — well above other countries, some of them with little or no human rights, supplying the world’s growing oil demand.”
Alex Pourbaix, CEO of Cenovus, said his company is focused on its environmental footprint. “Pulling investments from the oil sands and claiming it’s for climate change reasons is more about publicity than fact. Cenovus has reduced the GHG emissions intensity at our oil sands operations by approximately 30% over the past 15 years. And we’ve set ambitious targets to reduce our emissions intensity by another 30 per cent across our operations by 2030 and hold absolute emissions flat during that time.”
Well, Sonya and Alex, you may not have noticed, but the demand for oil is definitely not growing and reducing emissions from the production of oil is not the same as reducing emissions from burning it. Tar sands oil is the dirtiest form of fossil fuel energy there is. Not only does it make a cesspool of the places where it is extracted, it is so dirty that it costs more to refine and it’s still dirtier than other varieties of oil when burned.
Next we can expect armed protesters to be roaming the streets of Calgary screaming about liberty and saying they have a God-given right to destroy the Earth with the pestilence known as fossil fuels because, you know, jobs and profits and stuff. What we are really seeing here is another stake through the heart of the oil industry, which needs to fade away so it can be replaced by renewable energy alternatives.
That’s the only way to give people today any hope of leaving a habitable world to their grandchildren. The world is fully capable of thriving on renewable energy and electric vehicles. We know what needs to be done. Why are we so reluctant to do it?
Related: Norway EV Sales Reports