"Norway spurs rethink on fossil fuel companies": FT.

FT: “Norway’s decision to set up an expert group to see if its $840bn oil fund should stop investing in fossil fuel companies has triggered a wave of speculation since it was announced last week.”
“If the world’s largest sovereign wealth fund were to ditch such investments, it might not immediately affect Royal Dutch Shell or BP, both among the fund’s top 10 holdings, nor the other oil and gas companies that together account for 8.4 per cent of the fund’s equity investments.
But it would galvanise a gathering campaign to persuade investors that fossil fuel companies are an increasingly risky bet as regulatory efforts to combat air pollution and climate change intensify, and the costs of alternative energy sources tumble.
….the divestment movement has barely dented the investment landscape to date, even in the US where a vigorous grassroots divestment campaign has been targeting pension funds and university endowments for the last two years.
The small number of groups that has moved out of fossil fuels, such as Norwegian insurer and pension fund Storebrand, which has around $80bn assets under management, are minnows compared with those that have not, such as Calstrs, the $176bn pension fund for Californian teachers.
….Of the $12tn assets under management among university endowments and public pension funds, oil and gas company equities account for a maximum of $600bn, or 5 per cent, with debt making up about half that amount, according to research by Oxford’s Smith School.
That is a tiny figure considering the market capitalisation of ExxonMobil alone is more than $400bn.
….Other influential voices in the divestment movement, such as Jeremy Leggett, chairman of the London-based Carbon Tracker think-tank that has done influential work on stranded assets, says investors are already pressing big oil and gas companies to stem capital expenditure and hand it back as dividends.
“A year from now the Norwegian state pension fund may have fast declining desire to invest in fossil fuels anyway,” he says.
When UN climate negotiators meet in Paris at the end of 2015 to seal a global climate deal, he adds, “they might find they are in a sense playing catch-up to the markets that are already cutting emissions for them by default”.