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Wednesday, November 20, 2013

Some investment funds are dumping coal stocks

Will the coal industry run short of capital because too many investors are concerned with the greenhouse gases that mining and burning it will generate? Jesse Riseborough and Thomas Biesheuvel of Bloomberg News explore the possibility, suggested by a Norway investment fund's sale of coal and oil-sands stocks and a proposal by the country's opposition party to keep its sovereign wealth fund, the world's largest, from investing in coal.

The story notes that coal generated 30.3 of the world's primary energy last year, the biggest share since 1969, but quotes Nick Robins, head of HSBC’s climate change center of excellence in London: “There is the beginnings of divestment out of pure-play coal by some investors. There’s been a very marked rise in concern about this issue. There’s a recognition that as you move to a low-carbon economy that coal is potentially most vulnerable.”

Torklep Meisingset, head of sustainable investments for Norway's Storebrand ASA, which unloaded its coal stocks, told Bloomberg: “There could be an interesting parallel to tobacco,” which lost capital because of its health impacts and cigarette companies' perfidy about it. "The movement is an offshoot of a campaign by more than 70 investors to pressure all fossil-fuel industries on climate change," the reporters write. "It harks to the 1990s anti-tobacco push and is gaining help from unlikely partners. The International Energy Agency, a 28-nation group promoting energy security, is lobbying increasingly to limit the release of heat-trapping gases." (Read more)

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