Some of Australia’s biggest resource companies could lose a major investor if Norway goes through with a plan to ban its famous sovereign wealth fund from investing in coal, oil and gas

Norwegian wealth fund may ditch Australian resource firms

March 4, 2014

Peter Ker

Some of Australia’s biggest resource companies could lose a major investor if Norway goes through with a plan to ban its famous sovereign wealth fund from investing in coal, oil and gas.

Norway’s sovereign wealth fund is the world’s biggest at $840 billion and is a major shareholder in companies such as BHP Billiton, Woodside Petroleum and Whitehaven Coal.

A non-government majority in the Norwegian parliament had been edging towards a vote on banning the fund from investing in coal, and the pressure has forced the government to launch a year-long expert review into whether the fund should cease investing in all forms of fossil fuel.

The fund is already banned from investing in tobacco and weapons, and it sold out of 27 mining companies during 2013.

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Aside from Australia’s big resources companies, the fund is also a shareholder in Glencore Xstrata and Anglo American, as well as the world’s biggest petroleum companies including Shell, ExxonMobil, BP and Chevron.

A spokesman for Whitehaven Coal said the company was watching the situation in Norway.

The Minerals Council of Australia, which represents the nation’s big miners, pointed out that Norwegian miners were still opening coalmines. ”There is a stark divide between the overblown rhetoric on coal divestment and what is happening on the ground,” a spokesman said.

The Norwegian debate is not the first time BHP’s involvement in fossil fuels has been questioned in recent months after environmental campaigner Ian Dunlop ran for a position on the BHP board last year.

He failed in that bid, but said on Monday the Norwegian debate was ”a pointer” to the way the rest of the world would go. ”Financial markets really have to start thinking about the lemming moment when everybody moves and someone is left holding the baby, and I think we are getting close to that now,” he said.

Pengana Capital fund manager Tim Schroeders said Norway’s fossil fuel review could prompt similar introspection here.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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