The world’s richest sovereign wealth fund has sunk more money into coal just three months after a high-profile pledge to dump fossil fuels as part of its commitment to responsible investing, according to financial analysis by three environmental groups.

Instead of reducing its overall exposure to businesses based on coal, the Norwegian Government Pension Fund (GPF) increased its holdings by 3bn Norwegian kroner to NOK 85.8bn ($11bn/£7.3bn) by the end of last year, the report Still Dirty, Still Dangerous said.

The finding underlines the difficulties of making sure investors deliver on pledges to get out of coal, oil and gas in response to an anti-apartheid style global divestment campaign.

Others, including a key parliamentary committee on Wednesday, have called on the Norwegian pension fund, worth an estimated $850bn and based on the country’s oil and gas wealth, to quit coal for financial reasons. Global coal stocks have plunged more than 70% in value over the past five years, according to the Institute for Energy Economics and Financial Analysis (IEEFA).

However, the Norwegian government pension fund remains one of the biggest single investors in coal mining companies and coal-based utilities, according to the report. While the fund did withdraw from 32 companies last year for environment and climate reasons, it did not reduce its overall holdings in the industry.

World's biggest sovereign wealth fund dumps dozens of coal companies Read more

By the report’s calculations, the Norwegian fund had investments in companies responsible for 23% of global coal production. The GPF had merely reshuffled its investments between coal mining companies and electricity producers that rely heavily on coal, the report published by Future in Our Hands, Greenpeace Norway and the German NGO, Urgewald, said.

“There is meaningful divestment and there is pretend divestment,” Heffa Schücking, the author of the report said.



“With the Norwegian government pension fund, they simply moved all the money from coal mining companies to coal burning companies so you don’t know if there is actual divestment at the end of the day.”

The IEEFA, a US-based think tank, in a report of its own on the Norwegian government pension fund, said managers should withdraw from all mining companies with more than 20% of their output in coal, and power companies that source more than 20% of their fuel from coal-fired power plants.

Marthe Skaar, a spokeswoman for the fund, disputed Schüking’s figures. “It is wrong to say that the money we got from the sale of coal assets has been used to invest in companies that burn coal,” she said in an email.

Skaar said fund managers were working with companies to improve their environmental records, and this year wrote letters to the boards of large mining operations asking for their plans for a transition towards a lower-carbon economy.



“We have specifically asked for their strategy related to a future with less coal demand, estimated cost of separating the mining of coal from the company’s mining operations, and to disclose the potential timeline related to this,” she said.

She also said a number of the coal mining companies produced coal used for steel mills – and not burned for electricity.

But the finding spoke to rising concerns of campaigners such as 350.org, which has championed divestment as a way to transition out of a fossil fuel economy.

The Guardian and 350.org are partners in the Keep it in the Ground campaign calling on the Bill and Melinda Gates Foundation and the Wellcome Trust, the world’s two biggest health charities, to withdraw from the 200 biggest publicly traded coal, oil and gas companies.



“It’s like committing to fight lung cancer and then doubling your shares in Philip Morris,” said Jamie Henn, a spokesman for 350. “It’s important that institutions commit not only to divestment, but to transparency and sustainable reinvestment.”

Ellen Dorsey, the executive director of the Wallace Global Fund who has worked with big investors such as the Rockefeller Brothers Fund on the issue, said the report exposed a critical gap between perceptions and reality.

“While it is positive that the GPF has taken a strong stand against coal investments and reduced their overall investments in coal production, their leadership on this issue is being squandered when it is revealed that they have purchased new coal securities,” she said in an email. “It is so crucial that institutional investors are transparent about their investment strategies and holdings, across the board.”



The report described a scenario in which the GPFremained heavily invested in coal around the world.



In the US, the fund invested more heavily in eight of the 10 biggest coal-burning utilities, the report said. The power companies together burn 335m tons of coal a year, producing 15 times Norway’s annual greenhouse gas emissions.

In China, the fund increased its holdings in Chinese coal companies by 32% compared to 2013, the report found. In Japan, its holdings in coal grew by 21%.

And, while the fund did indeed divest from more than a dozen Indian coal companies, it re-invested 44% of the proceeds in the Reliance Group, which is one of the biggest developers of coal-fired power plants across Asia, the report found.

The Norwegian parliament has scheduled a vote on 5 June on divestment of the sovereign wealth fund.







