Commenting on the decision of the Norwegian Government Pension Fund Global to exclude AGL and put BHP under observation, Brynn O’Brien, Executive Director, ACCR, said:
“This is further evidence that AGL and BHP — both iconic Australian companies — are well behind the times. They are failing to put in place credible strategies to transition away from business models at odds with climate stability.
“Sophisticated investors like the Norwegian sovereign wealth fund look past the feel-good advertising and flimsy climate commitments of companies like AGL and BHP, and see that coal businesses have no future. They also know that coal investments are a direct threat to the profitability of other sectors in which they invest, like agriculture, property and tourism. The Norwegian fund has clearly not seen enough progress from either of these companies, and in the case of AGL has reached the decision that continuing to invest poses too great a risk.”
“Australian companies and their investors are let down by a policy environment which does not incentivise, and in some cases penalises, transition away from fossil fuels. Until we see regulatory activity to rein in Australia’s emissions trajectory, it is likely that heavy-emitting Australian businesses will see diminishing interest from climate-conscious investors.”
The Norwegian Government Pension Fund Global, holding more than one percent of global listed equities, has divested from AGL Energy Ltd. As at 31 December 2019, Fund owned 0.46% of AGL, a stake of roughly AU$65 million in the company.
The exclusion comes after the Fund implemented a new policy which prohibits investments in companies with more than 30% of their operations in coal, or companies extracting more than 20 millions tonnes of coal per year.
The fund announced its decision this morning. Five companies, globally were excluded: Sasol Ltd (South Africa), RWE AG (Germany), Glencore PLC (UK), AGL Energy Ltd (Australia) and Anglo American PLC (UK). In addition, it has put BHP Group Ltd/BHP Group Plc, Vistra Energy Corp, Enel SpA and Uniper SE ‘under observation.’
The Norwegian fund is known for its thorough research and ethical screens. It is an extremely influential player in the global investment sector.
Norges Bank Investment Management (NBIM) materials