One of the few countries in the world that was blessed by natural resources and managed to save the money is Norway. Many countries around the world have natural resources, but somehow very few of them have created wealth funds which can benefit their citizens. Norway wealth fund has over $1 trillion dollars which means the needs of all Norwegians are meant and the fund continues to grow.
In an article by Gwladys Fouche of Reuters, the Council on Ethics has recommended the Norway Wealth Fund which owns 1.5% of the world’s listed shares, due to climate change which is going on divest the fund of the worst polluters including the oil and gas companies, and steel companies.
The Council on Ethics recommends then the Central Bank of Norway which operates the funds slowly sells the shares off, the emphasis is not overnight because in a trillion dollar fund, the holdings are in the $13 billion range. The Council on Ethics had previously recommended and been accepted by Norway’s parliament the fund is not to invest in companies that produce nuclear weapons, landmines, tobacco, or violate human rights.
To avoid selling the shares, Norway Central Bank will determine how a company will adapt to climate change with very specific criteria. The bank will look at speed, time, and capital allocation. We want to see how they walk the walk, not just talk.
Linking to dividend paying stocks, for generations oil and gas stocks have been a staple of the economy, think the Rockerfellers and Standard Oil, however climate change is here and it has to be dealt with. In your own investments, you may want to own oil companies such as ExxonMobil, BP, and a host of other oil and gas companies because they tend to generate very good cash flows which translates into profits and dividends. As an investor there are alternatives. The sun shines and the wind blows in many areas of the globe it does it everyday and cash flow can be made. Institutions tend to have a harder time because they need to keep up with their peers to make the correct return, as individuals we have more alternatives.
There are more questions than answers, till the next time – to raising questions.