Citizens and community leaders converging this weekend in Northern Alberta for the annual “Tar Sands Healing Walk” will likely be quite happy with news that another major European financial institution is dropping their investments in Canada's tar sands.
Norwegian financial services giant, Storebrand, issued an update saying that the company has divested it's financial interests in 13 coal extractors and six companies heavily involved in oil sands extraction.
This follows on the heels of Dutch bank Rabobank announcing four days ago that they have instituted a “no-loan” policy to any company involved in so-called “extreme” fuel extraction, mainly tar sands and shale gas.
Both Storebrand and Rabobank are concerned about the long term financial risk the tar sands and other heavily polluting forms of energy production pose. In announcing their decision to divest of investments in the tar sands, Storebrand's head of sustainability, Christine Tørklep Meisingset said:
“[As] the stated climate goals become reality, these resources are worthless financially, but it is also true that they do not contribute to sustainable development in the extent and the pace we want. Exposure to fossil fuels is one of the industry’s main challenges, and for us it is essential to work purposefully to take our share of responsibility.”
A recent report describes Canada's tar sands, and other extraordinarily carbon intensive energy sources, as “stranded assets” that will likely be worthless in the long term as the world shifts to renewable and carbon-free sources. According to the report, titled Unburnable carbon 2013: Wasted capital and stranded assets, last year alone $674 billion was invested in finding and developing new potentially stranded assets like coal and oil sands.
Lead author of the report, Sir Nicholas Stern stated that:
“Smart investors can see that investing in companies that rely solely or heavily on constantly replenishing reserves of fossil fuels is becoming a very risky decision. The report raises serious questions as to the ability of the financial system to act on industry-wide long term risk, since currently the only measure of risk is performance against industry benchmarks.”
As the financial community begins to wake up to this idea of stranded assets and the citizenry continues to press for reform to the Canadian tar sands industry, we might be in for a very long hot summer.
Image Credit: Emma Pullman