The Pension Fund Increases in Climate Stallers

[English translation of article published 19 March 2009] 

By Pia A. Gaarder
Norwatch

In the middle of February the American investor group Ceres singled out nine multinational companies as lagging behind their industry peers in taking climate change seriously, and put them on a separate “Climate Watch List”. This involves the companies Chevron, Consol Energy, Exxon Mobil, General Motors, Massey Energy, Standard Pacific, Southern Company, Ultra Petroleum and Canadian Natural Resources. Most of these operate within oil, energy and coal exploitation, but Standard Pacific operates in construction work and General Motors in the car industry.

According to Ceres, these companies undermine their own ability to compete over time by not reacting adequately with regard to the global climate changes. The companies disregard demands from the owners to get climate strategies into position, and they lack plans for how to handle new and stricter requirements with regard to CO2 emissions.  The investor group believes that such companies represent a financial long-term risk by not adapting to a new climate regimen. The Future in Our Hands has calculated that the Norwegian Government Pension Fund – Global had invested 1.3 billion euros (11.3 billion Norwegian kroners) in these companies in 2007. 

Norwatch has now reviewed the Pension Fund’s portfolio survey, which was recently made public, and has found that the Pension Fund’s managers have increased the investments in the nine companies by 24.8%, from 1.3 billion to 1.6 billion euros. The majority of this sum is invested in the two companies Exxon and Chevron, which were black-listed by other fund managers a long time ago, including the mutual insurance company Kommunal Landspensjonskasse.

The Pension Fund, for its part, has increased investments in Exxon from 900 million euros (NOK 900 million) to 1.4 billion euros (NOK 12.2 billion) and in Chevron from 170 million euros (NOK 1.5 billion) to 533 million (NOK 4.7 billion). The Stock Exchange value of both these companies received rough treatment during the past year. The Pension Fund’s managers have nevertheless not only compensated for the loss but also increased the investments further.

Investments as of 31 December 2008 (in Norwegian kroners):
Chevron Corp: 4,658,525
Consol Energy Inc: 379,808,583
Exxon Mobil Corp: 12,216,867,795
General Motors Corp: 52,842,126
Massey Energy Co: 69,769,159
Standard Pacific Corp: 6,398,833
Canadian Natural Resources Ltd: 783,625,666
Southern Co: 420,694,774
Ultra Petroleum Corp: 132,555,636

Total: NOK 14,067,221,097