Norway Dumps Duke Energy Investments Over Coal Pollution
Norway’s $900 billion state pension fund, the world’s biggest, is dropping more than $500 million worth of shares and bonds in Duke Energy and three Duke subsidiaries, largely over the utility’s record of mishandling waste from its coal-fired power plants.
Fund manager Norges Bank announced the decision on Wednesday. It followed an April recommendation by the fund’s Council on Ethics that detailed North Carolina–based Duke’s history of illegal dumping of toxic waste into surface water and groundwater, decades of poor infrastructure maintenance, resistance to federal mandates to cut high sulfur dioxide emissions from its coal plants, and tens of millions of dollars in fines for flouting environmental and safety regulations.
Duke Energy is the largest utility company in the United States, based on its market value of just over $52 billion. Duke and its subsidiaries own and operate coal-fired power plants in North Carolina and five other states: South Carolina, Ohio, Kentucky, Indiana, and Florida. It also operates gas-fired, nuclear, and hydroelectric power plants and generates more than 2,400 megawatts of wind and solar power.
The ethics council’s report highlighted Duke’s responses to court orders to secure the sites where it stores coal ash. While “several court rulings have now ordered the companies to remove or seal these ash basins,” the report noted, the company’s response plan “will not be fully implemented for another 10–15 years. The Council also perceives the long-lasting and extensive breaches of the environmental legislation to be a considerable risk factor.”
The rulings came in the wake of the February 2014 Dan River disaster in which tens of thousands of tons of coal ash, along with upwards of 30 million gallons of heavy-metal-laden ash basin water, spilled into the North Carolina waterway from a storage basin at a closed Duke coal plant. Research from Wake Forest University released later that year estimated that environmental, health, and other damages from the spill topped $300 million.
In an emailed statement, Duke Energy spokeswoman Catherine Butler said the firm was disappointed but not surprised by the fund’s decision to divest. “It is unfortunate that Norges Bank did not consider Duke Energy’s proactive actions to enhance our environmental stewardship and close ash basins across our jurisdictions,” Butler wrote in the email. “Since 2011, we have retired more than 40 coal units across our generation fleet and this process will continue. From 2005 to 2015, we have reduced our carbon dioxide emissions by 28 percent and we have invested in emission control devices for our remaining coal units, resulting in reduced sulfur dioxide and nitrogen oxides by 86 percent and 65 percent, respectively.”
A clean water advocacy group lauded the fund’s decision. “I am thrilled that the Council on Ethics determined that Duke’s abysmal performance and the severe environmental risk still posed by Duke Energy’s leaking ash ponds warranted a special divestiture,” Donna Lisenby, clean and safe energy campaign director for Waterkeeper Alliance, said in a statement. “Duke Energy joins the list of many companies whose performance is so unacceptable to the Council of Ethics that they are black-listed as unsuitable for investment.”
The Norwegian government sets ethical guidelines for its government pension fund, which invests revenues from the country’s offshore oil and gas drilling in international stocks and bonds. Among the many high-profile divestments that have resulted from that policy:
- The fund barred 52 coal-related companies from its portfolio in April as part of implementing a new mandate prohibiting investments in companies that rely on coal-related ventures for 30 percent or more of their business.
- In 2015, the fund dropped six palm oil companies for their roles in forest destruction.
- In 2008, the fund sold off $850 million worth of investments in Rio Tinto, a London-based mining giant, because of environmental destruction caused by the company’s operations in Indonesia.
- In 2006, it divested from Walmart over what it termed systematic human rights and labor abuses by the Arkansas-based international retailer.