An international financial services company has announced its withdrawal from financing tar sands oil and pipeline projects in Canada and the U.S., Kallanish Energy reports.
The announcement of new investment restrictions from the Netherlands-based NN Group came last week.
The company that manages 240 billion euros ($277.13 billion) said it would not provide financial support to 10 oil sands companies and four pipeline companies due to environmental and social risks.
Added to the company’s publicly available Exclusion List were Canada’s top oil sands producers, and a quartet of pipeline companies, including TransCanada, Kinder Morgan, Enbridge and Energy Transfer Partners. All are involved in moving oil sands from western Canada to markets.
NN Group said it believes tar sands should not be developed because it’s not compatible with the Paris Agreement.
The greenhouse gas emissions from producing fuels from oil sands are higher than conventional crude oil, the NN Group said, in a two-page statement. It also cited human rights concerns and pollution as the main reasons for its decision.
“Climate change presents a risk to our investments, but can also provide opportunities if business models are timely adjusted,” said Dailah Nihot, a member of the NN Group Management Board, in a statement.
“If global warming is to be kept below 2 degrees in line with the Paris Agreement, we believe oil sands should not be developed. After evaluating the oil sands sector, we concluded exclusion sends an important signal in support of the quest for alternatives,” Nihot said.
The company’s restrictions apply to companies in which oil sands contribute 30% or more of average daily crude oil production, the NN Group said. The move was supported by asset manager NN Investment Partners.
The NN Group said it will divest the equity and fixed income holdings that are held within mutual funds managed by NN IP. The restrictions will apply to NN Group’s investments and funds managed on behalf of its customers, the company said.
The news was greeted with enthusiasm by the Sierra Club and Greenpeace, which had earlier called on financial institutions not to support such projects.
Tar sands account for 3% of world oil production and mainly take place in western Canada.
