Norway's $1 trillion wealth fund, the biggest of its kind in the world, will begin dumping its shares in oil and gas companies, paving the way for a huge divestment in the likes of Royal Dutch Shell and Exxon Mobil.
The Norwegian fund derives its income from the country's own oil and gas industry. It has significant stakes in several oil companies, with some $6 billion tied up in Royal Dutch Shell alone.
Environmentalists claimed the decision as a victory, with 350.org founder and environmentalist Bill McKibben tweeting, "Huge huge huge win--Norwegian govt (an oil state) is recommending that the world's largest sovereign wealth fund Fully Divest From All Fossil Fuel."
However, the country's finance ministry said it's excluding "companies classified as exploration and production companies within the energy sector," and that it "does not reflect any specific view on the oil price, future profitability or sustainability of the petroleum sector."
Minister of Finance Siv Jensen said Friday in a statement that the move is meant to "reduce the vulnerability of our common wealth to permanent oil price decline."
The nation of 5.3 million people derives much of its wealth from the fossil fuels industry, which accounts for some 20 percent of Norwegian GDP.