September 29, 2022

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Climate, oil fund |  Norway is on the worst list: tied to Russian carbon bombs

Climate, oil fund | Norway is on the worst list: tied to Russian carbon bombs

Leave it in the ground organization (Lingo) has developed and published its own initiative Database With an overview of foreign investments in controversial Russian companies, which extract fossil fuels. These Russian companies have extraction projects described as “carbon bombs”.

Lingo has mapped more than 400 foreign financial institutions, including four Norwegian ones, that it believes are financing Russian “carbon bombs”.

US financial institutions top the list with $23 billion in investments in Russian “carbon bombs”.

Qatar comes in second (15.3 billion), followed by Great Britain (2.5 billion) and Japan (1.9 billion). Norway finishes in fifth place.

The database, published on Ukraine’s Independence Day last week, identified four Norwegian financial institutions that allegedly invested $1.61 billion in Russian “carbon bombs”.

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– They invested in the best-selling companies

These four financial institutions are Statens pensjonsfond utland (SPU), also called oil fund, KLP (Kommunal Landspensjonskasse Gjensidig Forsikringsselskap), DNB and Storebrand.

– KLP, Storebrand, DNB and not least the Oil Fund have invested over many years in some really bad companies, both when it comes to the climate – as is evident in this database – but also when it comes to building a dictatorship with Putin on top, who gets brutal increasingly. These Russian companies are known to have close ties to the Kremlin, MDG foreign policy spokesperson Karl Johansen tells Netavisen.

Norwegian financial institutions are included in the following list of investments in Russian “carbon bomb” companies in 2022, according to figures from a database language:

  • Overseas State Pension Fund: invested $ 1,525 million in Lukoil, Gazprom and Novatek.
  • Storebrand: invested $32 million in Lukoil, Gazprom, and Novatek.
  • DNB: invested $27 million in Lukoil, Gazprom, Novatek and Tatneft.
  • KLP: invested $22 million in Lukoil, Gazprom, Novatek and Rosneft.

Oljefondet: – We are leaving Russia

Lingo, which developed the database, states that some financial institutions may have reduced their financial support to Russian companies after the outbreak of the war, but notes that many companies appear to have adopted a wait-and-see attitude.

Ukrainian activists are calling on foreign financial institutions to immediately get rid of their investments, reduce financial support for Russia’s invasion of Ukraine and for the sake of the climate.

However, Western sanctions against Russia and closed markets mean that Norwegian financial institutions remain paralyzed.

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Nettavisen contacted all financial institutions and informed them that their investments were linked to the so-called “carbon bombs” in Rossalamd, and asked them to comment on the information appearing in the database and the actions taken by each individual institution.

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The fund’s holdings in Russia have been frozen since the government’s decision in February. The market is closed, and as long as the market is closed, we can do nothing, State Pension Fund (SPU) press officer Line Aaltvedt tells Nettavisen.

At the end of February, the Ministry of Finance issued a very clear order to the Norwegian bank, in which it demanded that all investments of the Oil Fund in Russia be frozen. Norges Bank has also been asked to draw up a plan to sell the entire fund outside the Russian market.

– We are getting out of Russia, so it is only a matter of time, says Altvedt.

Storebrand Value Books

Storebrand stated that it reduced the value of Russian shares to zero after Russia attacked Ukraine and that sanctions were imposed on Russia.

– We sold some of our positions in Russia after the decision to sell was made and before the market closed for trading, but it was not possible to sell further lower. Sanctions not only make it impossible to buy or sell, but also operate active ownership, Bård Bringedal, who heads Storebrand’s equity management, wrote in an email to Nettavisen.

Bringdahl further states that the Russian authorities have “transferred” securities held by foreign investors into a separate class of securities.

The category is not tradable on any stock exchange. All Western brokerages have also been prevented by sanctions from facilitating trade. In addition, if we had sold the ruble and received it in return, we would not be able to exchange the ruble for Western currency, Bringdahl wrote.

“Until we have the possibility of orderly trading in a well-functioning market, we will therefore be sitting with the positions we have, which are still zero, and with no opportunity to have a dialogue with the companies,” he adds.

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DNB confirms ownership positions

DNB’s Director of Communications, Vibeke Hansen, stated that DAM (DNB Fund) has very limited exposure to Russia and Ukraine.

– DAM has followed the same policy as NBIM (Oljefondet editor’s note), which means that we have chosen to freeze the remaining holdings of Russian securities and plan to sell them as soon as the situation allows. We are still in a “freeze” state. The situation remains difficult — and the timeline is uncertain, Hansen wrote in an email to Nettavisen.

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DNB confirms that it has ownership positions in the Russian companies Lukoil, Gazprom, Novatek and Tatneft.

– But the market value is uncertain. The holding belongs to a passive equity fund (an index fund – DNB Global Emerging Markets Indeks), and active equity funds managed by DAM do not have any positions in these companies, Hansen wrote.

carbon bombs

Carbon bombs are fossil fuel extraction projects that can pump out 1 billion tons of carbon dioxide emissions. By comparison, Norway’s climate emissions amounted to nearly 49 million tons of carbon dioxide equivalent in 2021, according to the SSB numbers.

language It identified 41 extraction projects in Russia that are considered carbon bombs (23 of the projects have not yet started extraction). These Russian carbon bombs were operated or developed by Russian companies (including Gazprom, Novatek, Lukoil, Rosneft and Tatneft) with financial assistance from abroad.

– is an expression used to describe the worst fossil fuel projects and companies that you can invest in, many of which are in Russia. It is an educational designation to show that there is a difference between fossil investments. Some fossil investments are worse than others. This is not the MDG term, but the label used by Lingo as well as Ukrainian activists to identify the projects that produce the largest emissions, MDG foreign policy spokesperson Karl Johansen tells Nettavisen.

KLP: It was not possible to sell

KLP states that it still has investments in a number of Russian companies, including Gazprom, Lukoil and Rosneft. However, investments in Novatek were sold in connection with the outbreak of war in Ukraine.

– Since the end of February, we have also tried to sell the rest of what we invested in Russian stocks, but this was not possible for foreign investors, KLP Kapitalforvaltning Managing Director Håvard Gulbrandsen wrote in an email to Nettavisen.

– We are monitoring the possibility of selling our positions in Russia, but as it now appears, it is not likely that we will be able to do so in the near future, explains Gulbrandsen.

Gulbrandsen notes that the value of these investments is difficult to assess, and points to the uncertainty surrounding market access.

– So we priced Russian stocks much lower than indicated in the database. The values ​​used in the database are likely historical rates that are not current values, writes Gulbrandsen.

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Millennium Development Goals: – We have to wake up

However, the Millennium Development Goals say that measures such as freezing Russian investments are primarily due to a political decision, and refer to the Western sanctions regime imposed against Russia.

– It is good that the market is closed now and you can no longer invest. But these Norwegian financial institutions have invested with open eyes for a number of years in Russian carbon bombs and funded the Russian war in Syria and in the Donbass in Ukraine, following the annexation of Crimea in 2014, Johansen says.

– We have to wake up. The big picture is not pretty, neither for Norway nor for these Norwegian financial institutions. It’s good that the trade is now closed, but these investments show that making money has completely detached from both democratic values ​​and climate responsibility. We see the same in the government’s eagerness to achieve a free trade agreement with the largest dictatorship in history, China, even when Xi Jinping is at odds with his friend, dictator Putin in Ukraine, Johansen says.

Prime Minister Jonas Gahr Store (AP) said this summer that there is little progress in negotiations on a free trade agreement with China.

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The worst thing you can do today

The Ukrainian NGO Razom We Stand calls for an immediate halt to foreign investment in Russian drilling companies, as well as a permanent embargo on Russian oil, gas and coal.

– Putin’s war is financed by money from fossil fuels, and it is the fossil fuels that are causing an ongoing climate collapse, says Director Svetlana Romanko in a statement to Watchman.

– He says investing in Russian carbon bombs is the worst thing you can do today.

Storebrand states that they have an active climate strategy toward their investment, which accounts for the largest emissions of carbon dioxide.

– As part of our climate strategy, we have a goal of reducing emissions by 32 percent of our total investment by 2025. We are also part of the Climate Action 100+ international investor coalition, Gazprom and Lukoil are two of many companies this group usually targets dialogue With her, Bringdahl writes.