Norway’s oil fund sided with climate activists against ExxonMobil and Chevron

World’s largest sovereign wealth fund will side with climate activists against ExxonMobil and Chevron in efforts to force changes to emissions policy after investor pressure to back oil companies Europe.

Norway’s $1.4 trillion oil fund will back shareholder proposals at Exxon and Chevron’s annual meetings next Wednesday for the US Oil and Gas specialized to showcase its goals of reducing greenhouse gas emissions from the use of its products.

That contrasts with the fund’s refusal to back similar proposals — designed to ensure the world limits warming to below 2 degrees Celsius to meet the Paris climate agreement — at major European companies. like BP, Shell and TotalEnergies, the French conglomerate holding its annual meeting Friday.

Carine Smith Ihenacho, the fund’s director of corporate governance, told the Financial Times that there is a discrepancy between the way major European and US oil companies view the so-called Scope 3 emissions targets, which occur. when their products are burned or consumed.

“Exxon doesn’t really believe in the value of Scope 3 targeting. We think it should. Chevron, we don’t think they are ambitious enough in their transition plans. . . Both BP and Shell have a good Scope 3 target, they have a good transition plan,” she said.

The Norwegian oil fund is one of the most influential investors, owning an average of 1.5% of each company globally.

But its attempt to lead environment, society and governance (ESG) has put it on a collision course with some of the world’s biggest companies, as well as drawing criticism and calls for hypocrisy from environmental pressure groups.

Mark van Baal, founder of Follow This, the famous activist group behind shareholders’ recommendations at major oil companies, said he welcomed the oil fund’s support for Exxon and Chevron but was “surprised” that the fund failed to do the same for BP, Shell and Total.

“The foundation has a huge responsibility. This vote jeopardizes their credibility as stewards of the global economy. They’re basically telling Shell, BP and Total: you don’t have to reduce emissions this decade. We hope they will fix this oversight next year,” he added.

Ihenacho said the problem was not “black and white” and that one group was “hopeless” and the other “wonderful”. But she stressed that the big European oil companies were ahead on this.

Van Baal said BP and Shell had made “empty promises” for 2050 as European companies took “immature steps” on climate change. He added: “In a field of laggards, it is very easy to be a leader.

The Norwegian Fund voted against some of its biggest holdings this year, including Apple and LVMH on executive pay, and JPMorgan and Goldman Sachs for combining the roles of chief executive and chairman.

It has also begun filing its own shareholder resolutions on climate change in US companies.

However, the fund, whose cash flow comes from Norway’s oil and gas revenues, has faced accusations of hypocrisy for telling energy companies what to do as their nation rakes in record amounts. from oil and gas.

Ihenacho retorted that climate risk is a financial risk to the fund. “Our job in the fund is to create value for future generations but in a responsible way.

“We take no position on Norwegian policy. When you consider how you can create long-term value from a financial perspective, the fund has companies that can live in a netless society.”

Exxon and Chevron both urged shareholders to decline to support Follow This’s proposal, and said oil and gas companies would play an important role in the energy transition. “We believe that setting Scope 3 goals can have significant unintended consequences for society,” added Exxon.

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