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Fossil free fund

Storebrand, Norway’s largest private pension provider, launches a new fossil free fund as a sustainability measure to accelerate the green finance shift, and provide customers with an opportunity to reduce their exposure to fossil fuels.

Published 27.04.2017 by Caroline Sesvold Tørring

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CEO Storebrand, Odd Arlid Grefstad

– We have worked hard to create an index-aware, fossil free global equity fund. This is unique, and there is no similar mutual fund on the market, says Odd Arild Grefstad, CEO of Storebrand.

The fund excludes the entire oil and gas sector, including suppliers, as well as other companies where more than 5 percent of revenue comes from production and/or distribution of fossil fuels. The fund has about the same risk and expected return as the world index.

As Storebrand launches its fossil free fund, named Storebrand Global Pluss, they also call for the Norwegian Government to allow the US$ 900 billion Norwegian Government Pension Fund Global to reduce their exposure to fossil fuel investments significantly, and invest in more sustainable renewable companies, as part of a shift away from coal and other fossil fuels.

– As Storebrand proudly launches its fossil free fund, we urge the Norwegian Government to show leadership by opening up for more sustainable investments. This means less investments in the fossil fuel industry, and more in renewables. It is important that we, as an asset manager of pension funds, are ready to address the significant risk related to the investments in the fossil fuel industry, says Grefstad.

He emphasizes that Storebrand have the same goal as the Government Pension Fund: to maximize long-term returns.

– The only way to do this, is to invest in a more sustainable manner. Our Norwegian customers have exposure to fossil fuels through many sectors of the Norwegian economy. We feel that it is prudent to offer them an opportunity to moderate some of that risk through their investments. We already address this today, through our customer's pension funds, by including the fossil free fund in these products, says Grefstad.

One way to reduce Norway’s over-exposure to fossil fuel risk is for the fund to reduce their exposure to fossil fuel investments. Another way is to end the Government’s block on Oil Fund multi-billion dollar investment in renewables.

Norges Bank, which manages the giant fund, has already called for such investment. The use of renewable energy has accelerated whilst costs have fallen substantially as a result of technological advances and economies of scale. Whether the Fund will be able to invest directly in renewables is currently being discussed in the Norwegian Parliament and will be decided upon this spring.

– The current market produces solid returns, growth and is supported by a positive outlook. Risks are manageable. Storebrand, along with a host of national and international experts, are urging the Government to allow money to flow into solar, wind and other clean energy sources in order to secure Norwegian pensions, create jobs and economic growth, and a sustainable planet, says Grefstad.

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