Dive Brief:

• The wold's largest sovereign wealth fund yesterday announced it was dropping its investments in Duke Energy and some of the company's utility subsidiaries, citing "an assessment of the risk of severe environmental damage," Bloomberg reports. 
• Duke has been hit with penalties related to coal ash management, continues to rely on older and more-polluting power plants, and has been criticized for not doing more to integrate renewable energy onto its system.
• Duke told Bloomberg the company had anticipated the decision of Norges Bank, and wished the fund had paid more attention to the recent push towards carbon-free sources the holding company has made.

Dive Insight:

As investment vehicles become more environmentally-conscious and socially aware, investors are beginning to flex their muscles when it comes to backing green companies. Norges Bank, which runs the a $900 billion government pension fund, has now exited investments in Duke Energy and its wholly-owned subsidiaries Duke Energy Carolinas LLC, Duke Energy Progress LLC, and Progress Energy Inc.

The decision was based on a recommendation from the Council on Ethics for the Government Pension Fund Global, the bank said.

"For many years, these companies have among other things repeatedly discharged environmentally harmful substances from a large number of ash basins at coal-fired power plants in North Carolina," the ethics council said in its recommendation. "Several court rulings have now ordered the companies to remove or seal these ash basins."

The council said its recommendation to drop the companies was based on estimates that coal ash cleanup measures "will not be fully implemented for another 10-15 years."

Earlier this year, the North Carolina Department of Environmental Quality directed Duke to excavate coal ash from all of its holding ponds in the state by 2024, but a new law would allow for cap-in-place solutions, so long as Duke can provide permanent drinking water solutions for residents.

According to Triad Business Journal, Duke's estimates to clean up coal ash ponds in six states could reach $3.5 billion, with the bulk of that being spent in North and South Carolina. Duke also recently filed a long-term plan in North Carolina that, while highlighting the company's continued reliance on fossil fuels, also took steps to bring more carbon-free resources online.