​KLP tweaks coal divestment criteria as it offloads dozen holdings

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KLP will no longer invest in companies that draw more than 30% of their revenue from coal-based activities, lowering the threshold in line with the Norwegian sovereign wealth fund’s policies.

The new threshold, down from 50%, came into force this month and was announced as KLP confirmed it had excluded 20 companies from its portfolio.

A dozen energy companies were excluded for their coal-based activities, while KLP, which provides pensions to Norwegian local government workers, also excluded Glencore over its oil exploration activities off the cost of the Western Sahara.

The 12 energy companies – including Adani Power Adani Power, Duke Energy and Korea Electric Power – were excluded as of this month, KLP said.

Its head of responsible investment, Jeanett Bergan, added that KLP had noted the Norwegian parliament’s decision to force the Government Pension Fund Global to sell all stakes in companies drawing more than 30% of revenue from coal-based activities.

“KLP follows the GPFG guidelines and has been clear that we will look to the new coal criterion for the GPFG and consider further exclusions consistent with this,” Bergan said of the decision to lower KLP’s threshold to 30%.

“We stand better poised to achieve the green shift when investors pull together.”

Under the new rules, KLP was able to readmit Hong Kong’s Power Asset Holdings and Turquise Hill Resources of Canada, which have diversified their revenue away from coal-based activities, falling below 30%, according to the most recent accounts.

Of its decision to divest Glencore, the provider said its activities in Western Sahara constituted an “unacceptable risk of violating fundamental ethical norms”.

It noted that it had in 2013 excluded French oil company Total due to similar activities.

Three companies – BAE Systems, Fluor Corporation and Huntington Ingalls Industries – were excluded for their role in producing nuclear weapons.

A further four – Genting Berhad, Genting Plantations Berhad, IJM Corporation Berhad and IJM Plantations Berhad – were divested for their connection to palm oil plantations in Indonesia, as the plantations were established through deforestation. 


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