Thirty two coal mining companies were eliminated by the world’s richest sovereign wealth fund from its portfolio in 2014.
The Government Pension Fund Global (GPFG) in its first report, revealed that 114 companies were taken off its portfolio. The fund which is worth $850 billion (£556 billion) and founded on the nation’s oil and gas wealth indicated that the reasons for the elimination were purely due to the adverse climatic and environmental conditions created due to the operations of these companies.
A study revealed that only a small quantity of the fossil fuel can be burned when temperatures are kept below two degrees Celsius. Governor and President of the Bank of England and the World Bank, Mark Carney Jim Yong Kim together with others raised concerns to investors that a lot of the assets of fossil fuel can lose their value due to climatic changes.
“Our risk-based approach means that we exit sectors and areas where we see elevated levels of risk to our investments in the long term,” said Marthe Skaar, spokeswoman for GPFG.
Marthe Skaar gave a breakdown of the 22 companies GPFG has divested from due to their high carbon emissions. These included 14 coal miners, 5 star sand producers, 2 cement companies and 1 coal-based electricity generator. Other 16 coal miners in deforestation in Indonesia and India together with 2 US coal companies who are into mountain-top removal were all eliminated from the portfolio of GPFG. GPFG however, neither made mention of the names of the affected companies nor the value involved in the divestments.
The health sector was called upon on Wednesday by a group of medical organizations to stop using fossil fuels just as it did with tobacco sometime past. One of the biggest funders of medical research Wellcome Trust, indicated that one of the greatest challenges to global health is climate change.