Norway’s Largest Pension Fund Divests from Oil Sands

Oslo’s Kommunal Landspensjonskasse (KLP), Norway’s biggest pension fund, is now excluding investments in oil sands companies from its $81 billion portfolio.

“We continue to reduce our exposure to companies involved in an activity that is not aligned with a two-Degree Celsius temperature target,” KLP CEO Sverre Thornes said in a statement. “By excluding these companies, KLP continues to align its investments so that they contribute to a movement towards a low-emission society.”

KLP said its funds will now exclude companies that derive more than 5% of their revenue from oil sands-based activities. The move builds on the fund’s August announcement that it is excluding investment in companies that earn more than 5% of their revenue from coal-based activities.

“Together, these industries represent highly risky and environmentally damaging operations,” said Thornes, “which can now be replaced by clean energy alternatives through renewable power like solar and wind, battery storage, and the growth of electric vehicles.”

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Thornes said the divestment was also a “signal to the markets” that oil sands should not be part of the current and future energy supply, and was intended to inspire other institutional investors to follow their example.

“By going coal and oil sands free, we are sending a strong message on the urgency of shifting from fossil to renewable energy,” he added.

As a result of the oil sands divestment, KLP will exclude Imperial Oil, which is 69.6% owned by ExxonMobil; Cenovus Energy, Suncor Energy, Husky Energy, and Tatneft PAO. The equity holdings divested were valued at more than 305 million Norwegian kroner ($33.4 million), plus 229 million Norwegian kroner in bonds.

As with KLP’s coal threshold, the fund has gone from removing companies with 30% of their business coming from oil sands to 5%.

KLP has been stepping up its responsible investment activities this year. Last month it began pressuring agribusiness companies and their investors to end activities in Brazil that are contributing to the destruction of the Amazon rainforest.

“We are deeply concerned by what is taking place in the Brazilian rainforests,” Jeanett Bergan, KLP’s head of responsible investments, said in a statement. “Therefore, we have engaged companies which undertake significant trade in agricultural products from Brazil because we want rapid dialogues and concrete actions given this extremely serious situation.”

And in May, KLP announced that it would be divesting from alcohol and gambling investments. It decided to exclude 49 companies from its investment portfolios because they earn more than 5% of their revenues from the provision of gambling services. Likewise, it decided to exclude 39 companies because they earn more than 5% of their revenues from the production of alcohol.

Norway’s Largest Pension Fund Divests From Alcohol, Gambling Investments

Norway’s Pension Fund Divests from Upstream Energy Companies

Tags: divest, KLP, Kommunal Landspensjonskasse, oil sands

DeVry Education Group and four of its executives have settled a class action lawsuit brought by lead plaintiff Utah Retirement Systems for $27.5 million.

The lawsuit alleged that DeVry Education Group Inc., CEO Daniel Hamburger, CFO Richard Gunst, Gunst’s successor Timothy Wiggins, and Chief Accounting Officer Patrick Unzicker made false statements to investors about the job placement and salary outcomes achieved by its students after graduation. The complaint says that over a five-year period ending in late January 2016, DeVry and its executives repeatedly claimed that 90% of their students obtained jobs in their field of study within six months of graduation, with starting salaries of around $40,000.

“These metrics were critical to DeVry’s investors who viewed superior outcomes as a sign of DeVry’s financial health and stability,” said the complaint. “But as four separate government agencies have concluded – and as numerous former employees of DeVry corroborate – these employment outcomes were false.”

The plaintiffs said DeVry “maintained a corporate policy of both artificially excluding (or “waiving”) students from the statistic who should have been counted, and artificially including students in the statistic who should not have been counted.”

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Four government agencies investigated DeVry – the Federal Trade Commission, the Department of Education, the New York Attorney General’s Office, and the Massachusetts Attorney General’s Office. Each concluded that, based on DeVry’s own internal documents, that the company misled the public about its employment outcomes.

The Massachusetts Attorney General reported that certain DeVry programs had job placement rates as low as 52%. DeVry settled with each agency over its misrepresentations. The FTC settlement alone totaled $100 million.

The lawsuit also claimed that DeVry not only ignored a complaint from an employee who alerted an in-house attorney in its corporate compliance department that the university did not have the data to back up the 90% presentation, but that it fired the employee as a result his actions.

The plaintiffs cited the US Department of Education, which said that “this was not an isolated instance, but part of a pattern whereby DeVry either intentionally or through wanton negligence avoided clear statutory and regulatory requirements.”

A hearing will be held at US District Court for the Northern District of Illinois in December to approve the settlement.