Environmental Finance: “Asset manager Storebrand will analyse the sustainability of its utility holdings next month, Environmental Finance can reveal, following an analysis of the energy sector earlier this year which led to 19 exclusions.” “The Norwegian financial services firm, mainly active in pensions and insurance, in July announced it had excluded 13 coal companies and six oil businesses from all of its investment strategies.
The firm said the exclusions were a “logical step” since the financial value of fossil fuel resources will be dramatically reduced if global climate change ambitions – limiting temperature rises to 2°C – become reality, a concept known as ‘stranded assets’.
In September, it will undertake a similar analysis of its utility holdings, Christine Tørklep Meisingset, head of sustainable investment at Storebrand, told Environmental Finance.
….Utilities make up about 4% of Storebrand’s benchmark index.
….Most notably, the Carbon Tracker Initiative report on stranded assets, backed by economist Nicholas Stern, said that if there is to be an 80% chance of limiting temperature rises to 2°C, only 20% of fossil fuel reserves can be burned.
“There is no doubt that we have to reduce our exposure to fossil fuels,” Tørklep Meisingset said. “We don’t know exactly what will happen with climate regulations, and when the value of fossil fuel holdings will be affected,” she said. “As a pension provider, our core business is long term, and thus we need to act now rather than wait and see. In my view the largest gamble is to do nothing.”
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