Norway's KLP to exclude firms that derive 30% of revenues from oil sands
OSLO (Reuters)—KLP, Norway's largest life insurer, will exclude from its portfolio firms that derive 30% or more of revenues from the extraction of oil sands, in the latest example of an investor looking at the carbon footprint of its investments.
KLP, which has 641.5 B Norwegian Krone ($76.64 B) of assets under management, said the move was an extension of its 2014 policy to exclude companies that derive 30% or more of its revenues from coal.
Oil sands, also called tar sands, contain oil that is too thick to be refined without being heated or diluted first. The process to treat it before it goes to a refinery produces more carbon emissions than lighter types of oil.
"The coal criteria were very much linked to carbon dioxide emissions and the issue of greenhouse gases," said Anne Kvam, the head of responsible investments at KLP Capital Management.
"On that level, there is no reason to treat oil sands differently than coal: it is as bad," she said, adding that a "handful" of companies would be excluded, with names to be published in June 2018.
She did not say how much KLP's investments in those companies were worth.
KLP is the latest investor putting pressure on companies to lower their carbon emissions.
On Tuesday, more than 200 institutional investors with $26 T in assets under management said they would step up pressure on the world's biggest corporate greenhouse gas emitters to combat climate change.
And the World Bank said it would no longer finance upstream oil and gas projects after 2019, except under extraordinary circumstances.
In addition to excluding companies on the grounds of their exposure to oil sands, KLP will increase the amount of money it now commits to renewables projects worldwide from 1.075 B Krone ($130 MM).
KLP has not yet set a target for how much extra money it wants to invest in renewables as it is still working on the current commitments, said Heidi Finskas, the insurer's director for social responsibility.
"It takes time to build up the portfolio ... but it will be a significant increase," Ms. Finskas said. "This will be new (power generation) capacity, meaning not existing projects, but new capacity in developing countries."
($1 = 8.3707 Norwegian crowns)
By Gwladys Fouche
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