Nordea to cut coal exposure

Jan 20, 2015
<p>Largest Nordic fund manager plans to blacklist 40 coal-mining companies</p>

Nordea Asset Management, the largest Nordic fund manager, is planning to cut up to 40 coal-mining companies from its portfolio in an effort to improve its environmental impact.

According to the Financial Times, the fund’s head of corporate governance, Sasja Beslik, says Nordea is in the process of earmarking companies that have ‘large and sustained exposure’ to coal mining for future exclusion.

Beslik expects the firm to produce a final list of cut companies by the end of March. Any changes to Nordea’s holdings are likely to affect only a small proportion of Nordea’s total assets, valued at $228 bn, he adds.

Nordea joins a growing group of investors and institutions that are scaling back their holdings in coal and other fossil fuel-related companies. Foremost among them is fellow Norwegian institution KLP and its NKr470 bn ($62 bn), currently Norway’s largest pension pot, which said that last year it would blacklist companies that derive more than 50 percent of their revenues from coal.

Similar moves have been made by the Rockefeller Brothers Fund, which has assets of $860 mn, and a number of public sector funds and university endowments, including those at Stanford University and Harvard.

Last year the UK’s energy secretary Ed Davey said future investment in fossil fuels would become increasingly risky as global action to tackle climate change will curb demand, with companies forced to leave unprofitable fuel reserves in the ground. He singled out coal as ‘the short-term biggest worry by a long way’, though suggested any fossil fuels would be ‘the sub-prime assets of the future’.

It was also announced this week that Allan Polack, Nordea’s former chief executive, is set to join Denmark’s largest private pension firm, PFA, from April 1. Christian Hyldahl, formerly co-head of Nordea’s markets division, was revealed to be his successor.

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