TEHRAN, Young Journalists Club (YJC) - The Fund – believed to hold $1 trillion in assets – said in a statement as reported by media that it was in the planning stages of creating a program to divest in its fossil fuel assets.
Reports said the plan, backed by Norway’s central bank, still needed approval by the country’s finance ministry. It was also not expected to happen until late 2018 at the latest.
However, it could be a major sign that the world was already losing confidence in the future of oil.
Reports said the move could potentially be the biggest advance yet for a global fossil-fuel divestment campaign that has been promoted on college campuses and by environmental activists.
It could also be a setback for the proposed initial public offering of the Saudi national oil company, known as Aramco, since the Norwegian sovereign wealth fund, the world’s largest, would be a potentially large investor.
The public offering depends on high oil prices, while the move by the Norwegian bank suggested uncertainty about the future demand for oil, wrote the New York Times in a report.
With roughly $35 billion invested in oil companies, the Norwegian sovereign wealth fund is a large investor in Exxon Mobil, Royal Dutch Shell, Total, Chevron and Norway’s own oil giant, Statoil.
Statoil has begun to diversify its holdings by building large offshore wind-energy projects, added the report.
Other report said the move could be the harbinger of a greater shift toward sustainable energy holdings. To the same effect, environmental groups announced it would be a game changer for limiting the effects of global warming by human-induced climate change as a result of burning fossil fuels.
Many believe the future of oil would depend on its demand. While some argue that fossil fuels would still remain popular in major consumption points like the US and China, there are others who believe electric vehicles would dominate the transportation. This, they say, would deeply depress demand for fossil fuels in the future.
Source: Press TV