Last month, after more than a year of deliberation, Norway’s Finance Ministry recommended that the largest publicly held investment in the world take a partial-step in selling select oil and gas stocks from its trillion-dollar wealth fund. In a statement, Minister of Finance Siv Jensen clarified the decision’s purpose as diversification, rather than the denouncement of fossil fuels that’s rooted in other divestment decisions. She made clear that Norway, indeed, was a separate case.
Despite the clarity of Minister Jensen’s statements, and the decision to maintain investments in integrated companies, activists ran with the story that made headlines, claiming that a major oil-state had censured the very fossil fuels that built its economy. Thankfully, corrective articles sprang up from outlets like Forbes and the New York Times, pointing out that reality was quite contrary to this narrative.
The latest person to join the chorus of clarification was someone familiar with the pressure to divest — Comptroller Thomas DiNapoli, the fiscal manager behind New York’s public pension fund. When asked about Norway’s decision to sell holdings in exploration and production companies, during a recent interview with Axios, DiNapoli said:
“Some people have argued, ‘look at Norway, they’re pulling out of all of this.’ They’re not really. It’s a lot more nuanced and complex than divestment advocates recognize or are willing to admit. … You can’t lose sight of the fact that while we certainly want companies to do the right thing on climate change, at the end of the day we have to produce returns that support retirement benefits of 1.1 million New Yorkers.”
Maintaining his position, DiNapoli cites his fiduciary duty to the city of New York as his reason for not divesting. Divestment is symbolic in nature, offering no real solutions or impact on the issue of climate change and New Yorkers can’t afford to pay for anyone’s empty symbolism, just as Norwegians can’t.
Understanding the nuanced value of internal influence, when asked about divestment from ExxonMobil DiNapoli asserted that it was better to have a seat at the table than be helpless from the outside looking in:
“We [consider divesting] rarely and not without very significant deliberation … Having a voice at the table, trying to press them to do the right thing, that in the short run I still think is a smarter strategy.”
Similarly, when explaining the Finance Ministry’s decision, Minister Jensen pointed out that significant investments in low-emission technology are already sourced from the fossil fuel industry and divestment from large oil and gas companies would have constricted the fund’s chance to take part in these types of investments. She too acknowledged the value of having a seat at the table rather than using reactionary tactics to punish an industry that has the power to address the issues activists allegedly care about.
Climate change and environmental protection won’t be solved by selling stocks that will be bought by other investors shortly thereafter. Norway’s Finance Ministry and Comptroller DiNapoli understand this, and their decisions to reject costly, ineffective divestment in favor of remaining invested in developing sustainable technology is more ‘nuanced’ and ‘complex’ than activists are willing to admit.