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The sovereign wealth fund of Norway, which manages $1.4 trillion (€1.2tn) in assets, has said there are oil companies in its portfolio that “absolutely” aren’t doing enough to cut emissions, as the guidelines under which it operates are reviewed, potentially giving the investor more scope to act.
Norges Bank Investment Management still holds stakes in a number of fossil-fuel giants, including Exxon-Mobil, Chevron and BP, after failing to win political approval to dump its entire portfolio of oil stocks a few years back.
“These are companies we monitor very, very closely with a view to the climate and emissions,” Carine Smith Ihenacho, chief corporate governance officer at the Oslo-based fund, said.
The warning comes as Norway reassess the mandate it’s handed the world’s biggest wealth fund. A government-commissioned paper has proposed having climate risk underpin investment decisions across the fund, amid increasingly alarming evidence that the planet is heating up much faster than previously feared, with fossil-fuel companies behind much of that development.
The expert group, appointed by Norway’s finance ministry, recommended that Norway “change the mandate” under which the fund operates to “better handle climate risk.” Changes would include giving the fund greater scope to put pressure on greenhouse gas emitters in its portfolio, with scope to divest those that are too slow to cut their carbon footprint.
This year, Norway’s wealth fund started voting against corporate boards, and Ms Ihenacho said it’s a tool that will increasingly be used to bring about change.
That’s as investor revolts become a more frequent occurrence, resulting in some spectacular upsets at a number of the world’s biggest oil companies. Most notable among these was Exxon’s failure in May to repel an uprising that handed board seats to an activist investor group insisting the company do more to reduce its carbon footprint.
Norway’s wealth fund used the votes it had, which didn’t include weighing in on shareholder proposals on board seats, to demand that Exxon be transparent around political contributions, in an effort to stop the kind of corporate lobbying that leads to dubious climate policies.
The fund also withheld support for Exxon CEO Darren Woods to continue as chairman, based on its view that those jobs shouldn’t be held by one person.
But Norway, which is western Europe’s biggest oil producer, has faced criticism for not using its giant investment vehicle to fight climate change more aggressively.
