Norway's Oil Fund Slashes Coal Investments After Criticism

Norway's $900 billion sovereign wealth fund, the world's biggest, has reduced the value of its coal mining portfolio by almost 40 percent in the first quarter, its head told parliament on Monday.

Environmental groups and some Norwegian politicians have accused the fund of having too large an exposure to coal and not making enough use of its influence to reduce carbon emissions.

As of March 31 the fund had coal mining assets worth 493 million crowns ($3.75 million), down from 805 million at the end of 2014.

The fund owns assets worth 31 billion crowns in general mining, 109 billion in power production and 228 billion in oil and gas production.

The fund, owning around 1.3 percent of all listed companies globally, is still exposed to firms using coal for steel production and those where coal is only one of several business areas, such as large mining conglomerates, the fund's head Yngve Slyngstad told the parliament's Standing Committee on Finance and Economic Affairs.

He said the fund has sent letters to the largest general mining companies, "where we have requested plans for transition to low-carbon energy systems. We also raised the question of spinning off coal mining."

Environmental groups say the fund's coal exposure is much wider than it says.

"Which companies will Norges Bank influence in the Chinese coal sector? How is that going to work?" director of Urgewald, Heffa Schücking, told Reuters last week.

Urgewald has, together with Norway's Future In Our Hands and Greenpeace Norway, calculated that the fund had investments worth 85.7 billion crowns at the end of last year in companies that are either major producers or consumers of coal.

"They could improve their reporting format, because the way that they are presenting it they're actually only counting a small percentage of the sector and it creates a wrong impression," Schücking said.

The Finance Ministry proposed rules for the fund in April that would stop short of a blanket divestment from coal and oil, but the plan by the minority right-wing government requires approval by parliament, where some opposition left-wing parties want even stricter environmental curbs.

(Reporting by Stine Jacobsen)