Norwegian pension fund investors leaving oil sands
The largest pension fund in Norway has removed four Canadian energy names from its investment list and says it will no longer put money in companies that derive more than five per cent of their revenue from the oil sands.
KLP told Canadian Press it sold US$58 million worth of stocks and bonds as it reduces its tolerance threshold for companies with interests in the oil sands from 30 per cent to five per cent, matching its limit for coal investments.
The fund says it will now exclude Calgary-based Cenovus Energy Inc., Suncor Energy Inc., Imperial Oil Ltd. and Husky Energy Inc. from investment consideration, along with Russia-based Tatneft PAO.
Shares in all four companies have fallen since a year ago as growth outstripped pipeline capacity, leading to steep price discounts and legislated production curtailments in Alberta.
Keith Stewart, senior energy strategist with Greenpeace Canada, told Canadian Press in an email institutional investors are continuing to abandon high-carbon investments because they “can see where the puck is heading.”
In a news release, the Norwegian fund which administers more than US$81 billion in assets says a full exit from the oil sands is “great news” for customers because that activity is not aligned with a two-degree Celsius global warming target.
“By going coal and oil sands free, we are sending a strong message on the urgency of shifting from fossil to renewable energy,” said KLP CEO Sverre Thornes in a statement.