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

The world’s largest sovereign wealth fund will side with climate activists against ExxonMobil and Chevron in an effort to force a change in emissions policy after coming under investor pressure to support European oil and gas companies.

Norway’s $1.4tn oil fund will support shareholders’ proposals for the US oil and gas majors to present targets to cut greenhouse gas emissions from the use of their products at Exxon and Chevron’s annual meetings next Wednesday.

This contrasts with the fund’s refusal to back similar proposals – designed to ensure the world’s warming limits to under 2C – to meet the Paris climate accord – by European majors such as BP, Shell and Total Energy. On, the French group whose annual meeting is underway Friday.

The fund’s chief corporate governance officer, Caryn Smith Iheanacho, told the Financial Times there was a difference between European and US oil majors’ so-called Scope 3 emissions targets, which are what happen when their products are incinerated or consumed.

“Exxon doesn’t really believe in the value of setting a Scope 3 target. We think the company should do that. Chevron, we don’t think they’re being ambitious enough in their transition plans. . . BP and Shell both have Good scopes have 3 goals, they have good transition plans,” he said.

Norway’s oil fund is one of the most influential investors, owning an average of 1.5 percent of each company globally.

But its drive to lead on environmental, social and governance (ESG) investing has put it on a collision course with criticism and cries of hypocrisy from some of the world’s biggest companies as well as environmental pressure groups.

Mark van Baal, founder of Follow This, the leading activist group behind shareholder resolutions at oil majors, said he welcomed the oil fund’s support on Exxon and Chevron, but was “surprised” that it would join forces with BP, Shell and Total. failed to do so. ,

“The Fund has a huge responsibility. This poll puts his credibility at risk as manager of the global economy. Basically, they’re saying to Shell, BP and Total: You don’t need to reduce your emissions this decade. We hope that they will correct this mistake next year.

Iheanacho said the issue was not “black and white” and that one group was “disappointing” and the other “great”. But she insisted that European oil majors were ahead on the issue.

Van Baal said BP and Shell had made “empty promises” for 2050 as European companies had taken “small steps” on climate change. “In a slippery field, it is very easy to be a leader,” he said.

The Norwegian fund has voted against some of its largest shareholdings this year, including Apple and LVMH on executive pay, and JPMorgan and Goldman Sachs on combining the roles of chief executive and chairman.

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

But the fund, whose flow comes from Norway’s petroleum revenue, has faced accusations of hypocrisy for telling energy companies what to do when their country earns record sums from oil and gas.

Iheanacho countered that there was a financial risk to the climate risk fund. “Our job at the Fund is to create value for future generations but in a responsible way.

“We don’t take a view either way when it comes to Norwegian policy. When you look at how you can create long-term value from a financial perspective, it makes sense to fund companies that are net zero. Can live in the society.

Exxon and Chevron both urged shareholders to decline to comply with the offer, saying oil and gas companies would play a key role in the energy transition. “We believe that setting Scope 3 targets could have significant unintended consequences for society,” Exxon said.

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