The bank responsible for the largest sovereign wealth in the the world has just taken a stance against fossil fuels.
Norges Bank, which is the national bank of Norway worth an estimated $1 trillion, were hailed earlier this week for advising the nation’s government to drop sovereign investment in gas and oil.
According to the Guardian, the announcement comes as a welcome followup to Norway’s $90 billion divestment from the coal industry in 2015. While government representatives have reportedly stated that the decision to divest from gas and oil would not be made until next year, it could be a major game-changer for the fossil fuel industry. The bank’s statement alone reportedly caused European fossil fuel stocks to drop.
“The return on oil and gas stocks has been significantly lower than in the broad equity market in periods of falling oil prices,” said the bank in a statement.
“Therefore, it is the bank’s assessment that the government’s wealth can be made less vulnerable to a permanent drop in oil prices if the GPFG [sovereign wealth fund] is not invested in oil and gas stocks.”
Ireland became the first country in the world to divert all of its sovereign wealth from coal, oil, and gas after they passed the Fossil Fuel Divestment Bill in January. The decision resulted in $8.5 billion being pulled from the Ireland Strategic Investment Fund.
“The Irish political system is now finally acknowledging what the overwhelming majority of people already know: That to have a fighting chance to combat catastrophic climate change we must phase out fossil fuels and stop the growth of the industry that is driving this crisis,” said Éamonn Meehan of Trócaire.
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