OSLO: Norway’s US$900bil sovereign wealth fund, the world’s biggest, excluded Duke Energy Corp and some units from its investments because of a risk of “severe environmental damage”.
The executive board of Norges Bank, which oversees the fund, decided to exclude Duke and wholly-owned subsidiaries Duke Energy Carolinas LLC, Duke Energy Progress LLC, and Progress Energy Inc after an April 5 recommendation from its Ethics Council, Norges Bank Investment Management (NBIM) said in a statement on its website.
“For many years, these companies have among other things repeatedly discharged environmentally harmful substances from a large number of ash basins at coal-fired power plants in North Carolina,” the Ethics Council said in a separate statement on its website. While court rulings have ordered the removal or sealing of the basins, the planned measures won’t be fully implemented for a further 10 to 15 years, it said.
The fund owned a US$304mil stake in Duke shares at the end of 2015, or 0.62%, according to NBIM’s website. The fund also held bonds in Duke and the three subsidiaries valued at US$245mil at the end of last year.
The fund always exits investments before it announces exclusions, Norges Bank spokesman Runar Malkenes said, declining to provide details on sale dates or prices.
Norway’s fund excludes companies based on ethical rules including human rights, some weapons production, environmental risk and tobacco production. It has excluded more than 60 companies after recommendations from the council, most recently oil explorers Cairn Energy Plc and Kosmos Energy Ltd amid concerns over their activities in Western Sahara.
The fund also started excluding some coal producers and coal-consuming utilities this year, dumping more than 50 companies earlier this year and announcing more exclusions to come based on that criteria. – Reuters