Asset AllocationJanuary 24, 2014

Giant Norway Investor Pushes Sustainability Drive

<em>Pensions and life insurance provider Storebrand is cutting its carbon footprint and trying to stop deforestation.</em>

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(January 24, 2014) — Storebrand, the largest pension provider in Norway, has divested its holdings in 11 oil palm plantations and 10 coal-driven power producers, citing sustainability and environmental concerns.

On Wednesday, the company said its worries over deforestation had led it to pull capital from expanding oil palm plantations. Today, it said its sector-by-sector approach to reducing exposure to fossil fuels and CO2 emissions had seen it divest from coal-fired power stations.

“As a savings and pensions provider our goal is to ensure long-term positive returns for our customers,” said Head of Sustainable Investments at Storebrand Christine Tørklep Meisingset. “Part of that goal is achieved by reducing the risk in our portfolios, and climate change is the most comprehensive risk to sustainability.”

Meisingset said that Storebrand, which manages around €50 billion in pension and life insurance assets, would rather invest more in companies that were pushing the industries towards a sustainable approach.

With the latest exclusions of the recent power-generating firms, Storebrand has struck 23 companies in this sector from its portfolios. Firms that generate more than 4% of its output from renewable sources are permitted, but Meisingset said even this level was “awfully low”.

“It is especially important that the largest utility companies begin the change to a more sustainable model, to more power generation from renewable sources,” Meisingset said. “One way in which Storebrand can contribute, is by investing more in the best companies, and excluding the worst.”

Northern Europeans have led the charge on sustainable investment. Several large Danish pension funds have provided capital for wind farms and other renewable energy sources, while Dutch pension fund investor PGGM last year outlined its new governance structure that heavily relied on sustainable investment.