Norway’s KLP names coal divestment targets: 27 firms including Peabody, CONSOL etc.

Insurer and asset manager follows up November announcement

KLP, the mutually owned Norwegian insurer and asset manager which manages local authority pensions, has followed up its announcement that it was divesting NOK500m (€59m) from companies with a high coal exposure by naming the companies targeted.

There are 27 companies in total on the list (see below), including leading names such as Peabody Energy Corp., the world’s largest private-sector coal company, Pittsburgh-based CONSOL Energy Inc. and state-controlled Coal India Ltd.

KLP, which has assets of around NOK280bn (€33bn), said in November that while it was getting out of coal-linked firms, it was rejecting the “stranded assets” theory, saying that the arguments for fossil fuel divestment are weaker then they seem when examined on an ethical, social, environmental and financial basis. But withdrawing from coal would have no material impact on future returns, it reckoned.

It comes in the week that the Norwegian Ministry of Finance is set to announce the findings of an expert panel looking at the giant Government Pension Fund’s investments in coal and petroleum companies.

The group – chaired by former government official and current Principles for Responsible Investment (PRI) Chairman Martin Skancke – has evaluated whether exclusion is a more effective strategy for addressing climate issues than the “exercise of ownership and the exertion of influence”. The report is due on Wednesday (December 3).

And the news comes as a group of investors in the UK and elsewhere are putting the finishing touches to climate change resolutions (“strategic resilience for 2035 and beyond”) for the 2015 AGMs of oil giants BP and Shell.

It’s the latest phase of the ‘Aiming for A’ initiative, a £160bn (€201.8bn) coalition, which includes the likes of fund firm CCLA, the Local Authority Pension Fund Forum, members of the Church Investors Group (CIG) and others – along with support from environmental data body CDP.The companies are being asked to demonstrate good management of the strategic carbon challenge they face by aiming for continuous inclusion in CDP’s Climate Performance Leaders Index (CPLI). The resolutions will be filed with the companies in mid-December. RI reported the plans in October.

KLP is also excluding three companies (POSCO, Daewoo International Corporation and Olam International) because they buy cotton from Uzbekistan, which the investor says represents an “unacceptable risk” of KLP contributing to violations of labour and human rights. It is also exiting Calgary, Canada-based fertilizer group Agrium due to its purchase of phosphates from the disputed Western Sahara region. A previous exclusion from Internet firm Yahoo has been rescinded.

KLP Coal Exclusions:
Adaro Energy Tbk PT
Ameren Corp
American Electric Power Co. Inc
Banpu Public Comp. Ltd
China Coal Energy Comp. Ltd
China Resources Power Holdings Comp. Ltd
China Shenhua Energy Comp.
CLP Holdings Ltd
Coal India Ltd
CONSOL Energy Inc
Datang International Power Generation Comp. Ltd
DMCI Holdings Inc
Exxaro Resources Ltd
Hokuriku Electric Power Comp.
Indo Tambangrava Megah Tbk PT
Inner Mongolia Yitai Coal Co. Ltd
Peabody Energy Corp.
Power Assets Holdings Ltd
Reliance Power Ltd
Shougang Fushan Resources Group Ltd
Tambang Batubara Bukit Asam Tbk PT
Tata Power Co. Ltd
TransAlta Corp
Turquoise Hill Resources Ltd
Yanzhou Coal Mining Comp. Ltd