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

The world’s greatest sovereign wealth fund will aspect with local weather activists towards ExxonMobil and Chevron in an try to pressure modifications on emissions coverage after the investor got here underneath strain for supporting European oil and gasoline corporations.

Norway’s $1.4tn oil fund will again shareholder proposals at Exxon’s and Chevron’s annual conferences subsequent Wednesday for the US oil and gasoline majors to introduce targets for reducing greenhouse gasoline emissions from the usage of its merchandise.

That stands in distinction to the fund’s refusal to again comparable proposals — designed to make sure the world limits warming to underneath 2C to fulfill the Paris local weather settlement — at European majors reminiscent of BP, Shell, and TotalEnergies, the French group whose annual assembly is on Friday.

Carine Smith Ihenacho, the fund’s chief company governance officer, instructed the Monetary Occasions there was a distinction between how European and US oil majors considered so-called Scope 3 emission targets, which happen when their merchandise are burnt or consumed.

“Exxon don’t actually imagine within the worth of setting Scope 3 targets. We predict the corporate ought to achieve this. Chevron, we don’t assume they’re bold sufficient of their transition plans . . . Each BP and Shell have good Scope 3 targets, they’ve good transition plans,” she stated.

Norway’s oil fund is likely one of the most influential traders, proudly owning on common 1.5 per cent of each firm globally.

However its drive to take a lead on environmental, social and governance (ESG) investing has put it on a collision course with among the world’s greatest corporations in addition to drawing criticism and cries of hypocrisy from environmental strain teams.

Mark van Baal, founding father of Observe This, the distinguished activist group behind the shareholder proposals on the oil majors, stated he welcomed the oil fund’s assist on Exxon and Chevron however was “shocked” it didn’t do the identical with BP, Shell and Whole.

“The fund have an enormous duty. This voting jeopardises their credibility as stewards of the worldwide financial system. Principally, they’re saying to Shell, BP and Whole: you don’t have to cut back your emissions this decade. We count on them to right this oversight subsequent yr,” he added.

Ihenacho stated the problem was not “black and white” and that one group was “hopeless” and the opposite “nice”. However she confused that European oil majors have been forward on the problem.

Van Baal stated BP and Shell had made “empty guarantees” for 2050 as European corporations took “child steps” on local weather change. “In a discipline of laggards, it’s very simple to be the chief,” he added.

The Norwegian fund has voted towards a few of its greatest shareholdings this yr together with Apple and LVMH over govt pay, and JPMorgan and Goldman Sachs for combining the chief govt and chair roles.

It has additionally began submitting its personal shareholder resolutions on local weather change at US corporations.

However the fund, whose inflows come from Norway’s petroleum revenues, has confronted accusations of hypocrisy for telling vitality corporations what to do when its dwelling nation earns file sums from oil and gasoline.

Ihenacho retorted that local weather threat was monetary threat for the fund. “Our job within the fund is to create worth for future generations however in a accountable approach.

“We don’t have a view in relation to Norwegian coverage in any approach. If you take a look at how one can create long-term worth from a monetary perspective, it is sensible for the fund to have corporations that may dwell in a web zero society.”

Exxon and Chevron each urged shareholders to refuse to assist Observe This’s proposal and stated oil and gasoline corporations would play an essential function within the vitality transition. “We imagine setting Scope 3 targets can have important unintended penalties for society,” Exxon added.