
Norway's $860B Fund Drops 52 Companies Linked to Coal - bootload
http://www.bloomberg.com/news/articles/2016-04-14/norway-s-860-billion-fund-drops-52-companies-linked-to-coal
======
baccredited
The comments here are very negative so I'll share a little background on this
Norway fund in case you haven't heard of it. Norway started making money from
oil reserves and knew they wouldn't last forever. So they invested all the
profits in a fund that bought stocks. Now the value of the fund, if
liquidated, would net over $1 million per Norwegian citizen.

read more:
[http://www.bbc.com/news/business-28882312](http://www.bbc.com/news/business-28882312)

~~~
anexprogrammer
It's interesting to compare with the UK, which had less North Sea oil, but
still a significant amount.

When North Sea oil was first starting, Tony Benn, Energy Minister at the time,
wanted to start a fund exactly as the Norwegians later did. We didn't, and
unlike the Norwegians we didn't control production.

As oil revenues peaked through the 80s and 90s, Thatcher used them to pay for
pre-election tax cuts, welfare and generally squandered the inheritance.
Britoil was one of the early Thatcher privatisations. With the benefit of 40
years hindsight many feel the wrong choice was made. Unsurprisingly perhaps,
especially Scots. Though who we would have trusted to invest such a fund is
another matter.

~~~
tezza
Woah, I only moved to the UK in 2001, but it's pretty clear to me that Norway
!= UK in many fundamental ways

    
    
      1) WW1
      2) WW2
      3) Crippling Pension schemes like final salary ( don't know to much about Norways tho )
      4) Crippling strikes in '70s
    

The U.K. Only finished paying back the USA for WW2 a few years ago. Many died
and a lot of infrastructure needed rebuilding. Norway had much less of that
trouble.

~~~
PaulRobinson
Your grasp of European history and economics - specifically that of the UK and
Norway - is absurdly poor, to the point you should not be trying to make any
serious conclusion about either.

There is a reason why Jeremy Corbyn is popular right now (despite what the
papers tell you, in polling, he is).

~~~
PlzSnow
That is demonstrably nonsense, Jeremy Corbyn has among the lowest ratings ever
seen for the leader of a large political party, because he is a far-left
political extremist.

~~~
PaulRobinson
Read the polls.

Seriously, go read them. Labour is ahead.

~~~
grishenko
[http://ukpollingreport.co.uk](http://ukpollingreport.co.uk)

[https://twitter.com/jamesrbuk/status/722110121212526592](https://twitter.com/jamesrbuk/status/722110121212526592)

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mc32
Why not? This is both good long term for the environment and good long term
for their investments' potential growth. As Coal gets less favored status more
coal companies will feel pressure on their stocks. Sort term they may lose out
on some growth markets like India and China, but even those markets will
surely shift toward renewables in years to come leaving coal and companies
tied to it depressed.

~~~
laichzeit0
What exactly do you mean by "feel pressures" on their stock? Once a share has
been sold the company has already received all the money it will ever receive
from that share. Whether it goes up or down from that point is irrelevant to
the company. For whoever bought that share it might be a problem if he wishes
to sell it again. Most of the investors buy IPO shares for dividends, so as
long as the company makes money and pays dividends they also don't care about
the share price.

~~~
WalterBright
> as long as the company makes money and pays dividends they also don't care
> about the share price.

Oh, they care very much. For one thing, a tanking share price means the
dividend will surely be cut. A rising share price means the dividend will
likely increase.

~~~
tinkerrr
Dividends are paid from company earnings (profits), not stock, and as such,
stock price doesn't affect the ability of the firm to pay dividends. They
could both have the same underlying cause though - which is, a deteriorating
business condition that reduces earnings. Otherwise, e.g. if Coke's stock
price falls by 50% in a recession, doesn't mean it will cut its dividend.

~~~
WalterBright
Stock prices come from the same forces that shape dividends. There's a reason
that dividends from diverse companies all tend to cluster around the same
percentage of the share price.

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1945
It's likely not out of the goodness of their heart but rather coal's terrible
performance. There is a bankruptcy filing every other week. This week alone
the largest miner, Peabody, filed for bankruptcy.

~~~
Skinney
It's because the parlament told them to. Divesting in coal is a political move
stemming from environmental concerns. At least officially, I think some
parties supported the move because Norway doesn't export that much coal, and
this could potentially increase gass and oil revenue.

~~~
ZeroGravitas
The European oil/gas companies all support a carbon tax for the same reason.
Coal is such an appallingly bad fuel that a carbon tax would kill it (even
faster) and gas would replace it in large part.

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NamTaf
It's a good move, that nevertheless retains a healthy dose of irony given the
fund was developed almost entirely on the back of petroleum.

~~~
T2_t2
I was going to say the exact same thing!

"Our environmental destruction is fine. But yours? That is just too much!"

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frogpelt
This is more a press release than reportable news. The companies were sold
last year.

~~~
Animats
Well, it's good that they sold last year, because Peabody Coal went bust last
week.

------
outside1234
Alternative Title: "Fund built from selling petroleum gets holier than thou
with selling coal"

~~~
pm90
Arguably, all of modern capitalism was built on the back of some very dirty
and polluting technology. Would you say, then, that the capital of all the
developed world is tainted?

~~~
caminante
Except, in Norway, their pension and economy are STILL getting built on O&G.

I think your claims are too extreme.

edit: adding quote from European Commission data

    
    
      "Norway is in the global top 5 exporters of crude oil.  The oil
      and gas sector constitutes around 22% of Norwegian GDP and 67% 
      of Norwegian exports." [1]
    

[1] [http://ec.europa.eu/trade/policy/countries-and-
regions/count...](http://ec.europa.eu/trade/policy/countries-and-
regions/countries/norway/)

~~~
jakub_h
"their pension and economy are STILL getting built on O&G"

I don't quite get the peculiar use of the word "still" in your sentence,
seeing as the topic seems to be ditching coal and not ditching oil or gas.

~~~
caminante
Yes, the NOR pension is ditching* coal.

That said, you're not fairly representing the context of my comment. The
parent comment made this exaggerated critique, saying that "all of modern
capitalism" can be considered tainted based on PRIOR behavior (assuming the
grandparent's comment were valid.)

This is not only a strawman, but absurd.

I'm pointing out that it isn't limited to prior behavior for what we're
talking about. Here, we have a petro-state with 2/3 of its exports STILL in
O&G (aka "dirty technology") taking a stance on coal because coal's not
Environment Friendly™. This contrasts with countries that were built on "dirty
tech/slavery/whatever" and are no longer utilizing similar means.

To clarify, nobody's saying NOR can't change course or exhibit environmental
leadership. I'd argue NOR's investment implications and the $2.3B change in
allocation aren't significant.

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lazyjones
The list of dropped companies is here, if anyone cares:
[http://www.nbim.no/en/transparency/news-list/2016/first-
coal...](http://www.nbim.no/en/transparency/news-list/2016/first-coal-
exclusions-from-the-government-pension-fund-global/)

------
jaibot
"Investors other than Norway invest $860B in coal; money remains fungible and
markets remain pretty efficient"

~~~
woah
Midbrow dismissal

~~~
jaibot
I mean, yes, but I'll change my mind if I notice all the higher brows
disagreeing.

------
known
GDP assigns no value to work that’s not done for a paycheck, and extracts no
penalty for destruction of natural resources [http://qz.com/663110/happiness-
is-the-new-gdp/](http://qz.com/663110/happiness-is-the-new-gdp/)

------
sneezeplease
Good move by Norway!! Can you read this? I cant tell if I am shadow banned?
Please give me a vote in any direction

~~~
rory096
>I cant tell if I am shadow banned?

Yes, you are. Seems to have happened after this comment:

[https://news.ycombinator.com/item?id=10291099](https://news.ycombinator.com/item?id=10291099)

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diffraction
coal is in the process of consolidation/deleveraging/bankruptcy and they would
be making this decision anyways. congrats on extracting social justice points
from your business decision.

~~~
barney54
Along with a heaping dose of hypocrisy. If the co2 from coal is bad, then the
same is true for the coal from oil and natural gas.

~~~
awakeasleep
Hey, I know this is silly because the fund isn't event taking these actions
explicitly for environmental reasons, BUT if they were, your comment would be
a great example of an Internet debate fallacy that I try and fight.

If an entity is doing something 'bad', reducing the scope or amount of that
behavior is neither hypocritical nor pointless. It doesn't matter if it's a
big company that pollutes, or an individual trying to reduce a bad habit.
Movement in the right direction is an essential part of things getting better.

~~~
barney54
If these are good actions, then do more. What's the point of half measures?

~~~
nsm
Relevant read [https://blog.jaibot.com/the-copenhagen-interpretation-of-
eth...](https://blog.jaibot.com/the-copenhagen-interpretation-of-ethics/)

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electic
The bigger question about Norway's $860BB fund is the price of oil. Right now
oil is trading at $39.75[1] a barrel. Now that the Doha deal fell through
earlier today, it is highly likely that oil will further fall over the coming
weeks. Norway, and other sovereign funds, are now liquidating assets to make
up for the shortfall in revenue.[2] We're talking about $5.7T in assets across
these oil derived sovereign funds. That's a lot of selling folks.

[1] [http://www.investing.com/commodities/crude-oil-streaming-
cha...](http://www.investing.com/commodities/crude-oil-streaming-chart) [2]
[http://www.institutionalinvestor.com/article/3533485/investo...](http://www.institutionalinvestor.com/article/3533485/investors-
sovereign-wealth-funds/oil-has-sovereign-wealth-funds-hitting-sell-
button.html)

~~~
NegatioN
The withdrawal from coal is a year old decision[1] made my our parliament,
which is as far as I see not based on plugging the holes in any way. We have a
policy that states you can use up to, but not more than the expected surplus
of the fund for the coming year. [2] So, I agree we're spending more than we
used to do, but this is exactly the reason the fund was made in the first
place. As long as politicians are curbed, and we stay within this rule, I'm
not scared no matter how many billions are used from the fund.

EDIT: and the core of my comment should have been, that I'm not sure this
could be seen in the same context as other national funds, as we're "too big
to fail"^tm

[1] :[http://e24.no/boers-og-finans/oljefondet-ut-av-
kull/23459941](http://e24.no/boers-og-finans/oljefondet-ut-av-kull/23459941)

[2] :[https://snl.no/Handlingsregelen](https://snl.no/Handlingsregelen)

~~~
kagamine
More scared about the number of people in the oil business competing for jobs
as the number of redundancies increases. As a n expat Brit in Norway I'm
already at a disadvantage when applying for work.

------
cavisne
No problems with oil though!

[https://en.wikipedia.org/wiki/File:Norwar_Exports_Tree_Map_(...](https://en.wikipedia.org/wiki/File:Norwar_Exports_Tree_Map_\(2009\).pdf)

We will see this fund drain to zero over the next few years easily, Norway is
a completely broken economy with high unemployment masked by "scholarships".

~~~
imtringued
>No problems with oil though!

Electric cars are still not widespread yet and oil will always be used in
planes, trucks or ships for long distance transport.

~~~
notahacker
For that matter I'm pretty sure the growth of the petroleum driven automobile
industry in Asia and Africa is going to vastly outstrip its gradual (and later
perhaps even mandatory) replacement with electric vehicles in the West...

