The bank that runs the world's biggest sovereign wealth fund has told the Norwegian government it should dump its shares in oil and gas companies, in a move that could have significant consequences for the sector.
Norges Bank manages Norway's $1 trillion (£758bn) sovereign wealth fund on behalf of the government.
Norway's trillion-dollar sovereign wealth fund is proposing to sell off all its holdings in oil and gas companies.
"This advice is based exclusively on financial arguments and analyses of the government's total oil and gas exposure and does not reflect any particular view of future movements in oil and gas prices or the profitability or sustainability of the oil and gas sector", said Deputy Governor Egil Matsen in a press release.
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But Norges Bank said that investing money back into the energy sector meant the government's exposure to the price of crude was too high, particularly given the country's majority stakes in Statoil ASA.
The Norwegian fund, officially known as the Government Pension Fund Global, is among the largest investors in a wide range of oil companies, including Royal Dutch Shell, BP, Chevron and Exxon Mobil.
The bank recommended the removal of oil stocks from the fund's benchmark index, which would still give it a little leeway to invest modestly in the sector.
If accepted by the finance ministry and adopted by parliament, the fund would over time divest billions of dollars from oil and gas stocks, which now represent 6 per cent - or around $37-billion - of the fund's benchmark equity index.
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Norges Bank's proposal must now be reviewed by Norway's Finance Ministry, which has said it will announce its own view in the autumn of next year.
The fund has doubled in value over the past five years and was just given the go-ahead to boost its stock holdings to 70% of its portfolio from 60% to help drive returns. The fund has a small amount of leeway to make individual investments and wants to keep oil and gas in its "investment universe", he said.
McKibben compared the bank's recommendation to "the moment when the Rockefellers divested the world's oldest oil fortune" in 2014, when the heirs to Standard Oil said that if founder John D. Rockefeller were alive in the 21st century, "he would be moving out of fossil fuels and investing in clean, renewable energy". "The advice from the Bank requires a thorough assessment, in line with established practice for key decisions on the management of the Fund", Finance Minister Siv Jensen said.
"The Government is responsible for the Norwegian economy as a whole and must take a broad and comprehensive approach to this issue", she was quoted as saying in a statement.
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