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With Energy, Little Is Black or White. Here Come the Grey Hats.

Everyone seems to play together so nicely these days.

Australian mining giant BHP Billiton teamed up with two major environmental groups to preserve a 125,000-acre biodiversity "hotspot" in Chile, where the world's biggest woodpeckers live among the world's smallest deer.

BHP Billiton says its collaboration with environmental groups is evidence of the importance of sustainability to its mission. The Valdivian Coastal Reserve project is one of many examples of partnerships unthinkable for a mining concern in years past. The company's state-of-the-art 2013 sustainability report runs 50 pages , and contains metrics on everything from greenhouse gas emissions to contractor human-rights training.

It's all great and noble and worthy of attention. No, really, it is. BHP Billiton understands that mutual coordination with key groups -- communities, regulators, investors -- can make or break its reputation and, consequently, its long-term success. It also happens to be one of the largest producers of coal, which makes it simultaneously an icon of un-sustainability.

Many companies will keep one foot in a dirty-energy past and one in a clean-energy future during the current global energy transformation. It's an awkward position for a growing number of companies to be in. They're not wearing black or white hats, but charcoal grey, and that's enough to make them targets in some circles.

Take the Arctic Circle, which is warming faster than the rest of the globe. Coal-mining companies are under scrutiny at Norway's $817 billion sovereign wealth fund, the world's largest, as members of Parliament and investment executives weigh the long-term prospects of this carbon-heavy conventional fuel. Norway's fund has already cut its investments in coal producers by half.

A proposal in the Norwegian parliament, put forth by the opposition, would expand the divestment, Bloomberg and Reuters both reported yesterday. If the plan excluded all coal mining companies, another 90 companies would lose the fund's investment, including BHP Billiton, which is the top holder of proven and probable coal reserves, according to data compiled by Bloomberg.

What's a company supposed to do? To some extent, intensify what they are doing. BHP Billiton supports a carbon price in public policy and uses an internal carbon price in its own investments, according to a BHP spokesperson. It has reported emissions since 1996 and last year held them below 2006 levels, despite growth.

"We believe that as the world makes its energy choices we are likely to see a transition to lower carbon sources and actively manage our portfolio to reflect this view," the spokesperson said in an email.

Norway's attention to the greenhouse-gas potential of its investments is part of a larger trend: Some investors are realizing that today's valuable carbon minerals might turn out to be tomorrow's liability.

It also suggests that individual sustainability programs are good for a lot of things -- but not necessarily the really big ones.

Also by Eric Roston

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