Coal Seen as New Tobacco Sparking Investor Backlash

So, American lawmakers don’t get it, but an increasing number of investors do:  coal burning will drive the world to ruin, as cigarette smoking sowed havoc in lungs around the world.  Owning shares in coal industries may be a lose-lose propostion.

From Bloomberg News

About $8 trillion of known coal reserves lie beneath the earth’s surface. The companies planning to mine and burn them are being targeted by a growing group of investors concerned with the greenhouse gases that will be made.

Storebrand ASA (STB), which manages $74 billion of assets from Norway, sold out of 24 coal and oil-sands companies since July including Peabody Energy Corp. (BTU), the largest U.S. coal producer, citing a desire to cut fossil-fuel industry holdings. This month Norway’s opposition Labour Party proposed banning the country’s $800 billion sovereign wealth fund from coal investments.


Future curbs on carbon emissions beyond 2020 may cut valuations on coal assets by as much as 44 percent, according to HSBC Holdings Plc.

“There is the beginnings of divestment out of pure play coal by some investors,” Nick Robins, head of HSBC’s climate change center of excellence in London, said in a Nov. 12 phone interview. “There’s been a very marked rise in concern about this issue. There’s a recognition that as you move to a low-carbon economy that coal is potentially most vulnerable.”

In related news the U K has joined the US and others, along with “international financial institutions in ending public financing for new coal-fired power plants overseas, except in rare cases where no alternatives are available.”

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