As part of our pilot grant making program, the Goldman Prize recently awarded a grant to 1994 Goldman Prize winner Heffa Schucking and her organization Urgewald to support their campaign to influence European banks and government institutions to cease financing for coal related projects.
Urgewald works to monitor the international environmental impacts of investments by European banks and companies. Their campaigns seeks to reduce access to capital for environmentally destructive projects by creating reputational risk to the financial institutions involved. Urgewald’s tactics have proven to be a powerful and successful tool.
In 2006, Urgewald helped convince banks to stop financing the proposed Belene Nuclear Power Plant in Bulgaria. In 2008, they forced the Asian Development Bank to cancel a loan to the Phulbari coal mine in Bangladesh, which would have displaced 300,000 farmers and destroyed a valuable protected area.
Today, they are celebrating another major victory. On June 5, 2015 (World Environment Day) the government of Norway announced it will be divesting its Government Pension Fund Global (GPFG) from coal related investments. Norway’s GPFG is the second largest pension fund in the world, worth some $9 billion, making it biggest coal divestment in history.
Schucking reacted to the news: “Our campaign work in Norway has just resulted in an amazing win. Today, the Norwegian Parliament took a unanimous decision to ban companies from the Government Pension Fund if more than 30% of their business is coal-based. The Norwegian GPF is the world’s second-largest Pension Fund, so this has really far-reaching impacts.”
Truls Gulowsen, head of Greenpeace Norway, who Urgewald worked with on the campaign, stated, “This is the biggest divestment from coal in history and it should pave the way for other investors and countries to follow suit.”
Urgewald released a report that shed more light on the details of Norway’s restrictions:
“[Norway’s] Finance Committee recommends the exclusion of ‘coal power companies and mining companies, who themselves or through operations they control, base 30% or more of their activities on coal, and/or derive 30% of their revenues from coal.’ The Committee, however, also calls for ‘forward-looking assessments’ that take note of ‘companies’ plans that would change the share of coal-related activities and the share of activities relating to renewable energy sources.’ It is fair to assume that this provision will work in both directions, meaning:
- Companies that are beneath the 30% benchmark may still be excluded if they have significant coal investments in the pipeline.
- Companies that hover above the 30% may be retained if they can show conclusive plans for a reduction of their coal-related business.”
The Norwegian Parliament plans to implement these recommendations by January 1, 2016. In accordance with existing rules, the list of excluded companies will also be published, making it easier for other investors to follow suit.