The Norwegian Sovereign Wealth Fund, which manages US$1.4 trillion in assets, said that some oil companies in its portfolio “absolutely” are not doing enough to reduce emissions because its operating guidelines are under review, which may give investors Come more scope of action.

After failing to obtain political approval to sell off its entire oil stock portfolio a few years ago, Norges Bank Investment Management still holds shares in many fossil fuel giants including Exxon Mobil, Chevron and BP. .

Carine Smith Ihenacho, chief corporate governance officer of the Oslo-based fund, said in an interview: “We monitor these companies very, very closely to understand the climate and emissions.”

The warning comes as Norway is reassessing its mandate to the world’s largest wealth fund.

A document commissioned by the government on Friday proposed that climate risk support the investment decision of the entire fund, because increasingly shocking evidence shows that the earth is heating up much faster than previously feared, and fossil fuel companies are the largest among them. Part of the development behind the scenes.

An expert group appointed by the Norwegian Ministry of Finance recommended that Norway “change the mandate of the fund’s operations” to “better deal with climate risks.”

Changes will include giving the fund more room to put pressure on the greenhouse gas emitters in its portfolio, and room to divest those who are too slow to reduce their carbon footprint.

Investor uprising

This year, Norwegian wealth funds began voting against the company’s board of directors, which Ihenacho said is a tool that will increasingly be used to bring about change.

That’s because investor resistance has become more frequent, causing some of the world’s largest oil companies to have some surprising unease.

The most notable of these was ExxonMobil’s failure in May to repel an uprising that handed over a board seat to an activist investor group that insisted that the company take more steps to reduce its carbon footprint.

Norway’s wealth fund used the votes it had (not including weighing shareholder proposals on board seats) to ask ExxonMobil to be transparent about political contributions to prevent corporate lobbying that leads to questionable climate policies.

The fund also refused to support ExxonMobil CEO Darren Woods to continue as chairman because it believes that these positions should not be held by one person.

“We use the tools we have,” Ihenacho said.

Bear big oil

She also pointed to Chevron as an example of mandatory shareholder change.

Norway’s wealth fund is one of the investors supporting a successful proposal that insists that Chevron’s emissions targets include Scope 3, which is the broadest definition and includes the carbon footprint of the oil giant’s customers.

The vote took place on the same day that ExxonMobil’s shareholders won, and coincided with the Dutch court’s decision to force Royal Dutch Shell to cut emissions, which had an impact on the oil industry that is accustomed to pushing its own agenda.

Oil giants and their emissions

But Norway, the largest oil producer in Western Europe, has faced criticism for not using its huge investment tools to more actively respond to climate change.

This month, as the world prepares for the latest assessment of the United Nations Intergovernmental Panel on Climate Change, a group of scholars and economists lashed out at countries that have not yet set net-zero emissions targets for their wealth funds. Signatories include Christiana Figueres, former executive secretary of the United Nations Framework Convention on Climate Change. At the forefront of the line of fire is Norway.

Havard Halland, a former senior economist at the World Bank, initiated a pressure campaign against sovereign investors. He said: “Now it has reached the point where choosing not to set climate goals is a positive choice.”

He pointed out that Norway’s wealth fund emits twice as much carbon dioxide through its investment portfolio as the entire country, and this is not included in the official Norwegian emission statistics.

He said that because Norway “opted out” to set climate targets for its wealth fund, the country is basically “free-riding” other countries’ efforts to combat global warming.

“Complex” risk

According to the email statement in response to the question, the Norwegian Ministry of Finance regards global warming as “a complex financial risk.” The ministry will now consider the recommendations of the expert group, and any subsequent decisions will need to be passed by parliament. The mission of the fund will not change until next year. Opinion polls show that the coalition currently led by the Conservative Party will be replaced by a more left-leaning group in the September elections.

Christian Hahe, spokesperson for the Net Zero Asset Owners Coalition convened by the United Nations, said, “For sovereign wealth funds, making commitments is a challenge because it needs to be aligned with the government’s agenda and needs to meet complex strategies. Decision-making process.”

At the same time, the Norwegian wealth fund said it is working to reduce the emissions of its investment portfolio.

“We told the company to set goals in line with the Paris Agreement,” Ihnacho said.

“As a fund, it is clearly in our interest to achieve the goals of the Paris Agreement,” she said. “This includes net zero emissions by 2050.”


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