Norway Rejects Ban on Coal Investments for Biggest Wealth Fund

Norway’s parliament rejected a proposal to ban the nation’s $850 billion sovereign wealth fund from investing in coal companies.

“I’m disappointed but it’s been a big move to put this issue on the agenda,” Torstein Tvedt Solberg, one of the Labor Party lawmaker’s behind the proposal, said in an interview in Oslo. The party will revise its proposal and may submit it again after April, he said.

Built on Norway’s oil and gas income, the fund takes into account ethical rules on human rights, some weapons production, the environment and tobacco when deciding on investments.

The opposition Labor Party’s proposal to stop the fund from investing in coal would have affected “small, insignificant” investments worth about 2.5 billion kroner ($414 million), Norges Bank Investment Management Chief Executive Officer Yngve Slyngstad said at a parliamentary hearing in January.

While the proposal by Labor, Norway’s largest party, was in line with the political aims of the Liberals and Christian Democrats, it lost backing as the two smaller parties accepted a suggestion for a study into the impact of excluding oil, gas and coal companies from the oil fund. Prime Minister Erna Solberg’s minority coalition needs the support of those two parties to achieve a majority in parliament.

Norges Bank Investment Management, which manages the fund, held stakes in coal producers including BHP Billiton Ltd., Bumi Plc, Arch Coal Inc. and Peabody Energy Corp. as of Dec. 31, according to the latest information available on its website.

The government has proposed increasing the fund’s focus on emerging markets and clean energy and plans to submit recommendations to parliament next month. The fund is currently mandated to hold about 60 percent in stocks, 35 percent in bonds and 5 percent in real estate.