Background
As part of Climate Action 100+, Storebrand Asset Management co-leads for Equinor, and has been engaging with Equinor alongside peer investors through that initiative. Equinor is majority owned by the Norwegian Government, a signatory to and committed to the Paris Agreement. At last year’s AGM, the Norwegian Government – which holds 67% of Equinor’s shares – published its expectations for Equinor in this regard:
“The state expects cf. Meld. St. 6 (2022-2023) – Greener and more active state ownership (white paper on the State’s direct ownership of companies) that: … ii) The company sets targets and implements measures to reduce greenhouse gas emissions in both the short and long term in line with the Paris Agreement, and reports on goal attainment. The targets shall be science-based when available.”
We share the Norwegian Government’s and company’s ambition to meet the goals of the Paris agreement. We have had constructive dialogue with both Equinor and the Norwegian Government in respect of Equinor’s climate targets, strategy and disclosure.
However, we feel that the current strategic direction and capital expenditure (capex) planning falls short of what is needed to meet Equinor’s commitment to support the Paris Agreement.
Summary of the resolution and our voting intention
Agenda item 15: “In keeping with Equinor ASA’s commitment to support the goals of the Paris Agreement, and considering the Norwegian Government’s explicit expectations for the company to align actively with the Paris Agreement as per its statement at Equinor’s 2023 AGM, the general meeting asks the Board to update its strategy and capital expenditure plan accordingly. The updated plan should specify how any plans for new oil and gas reserve development are consistent with the Paris Agreement goals.”
We will vote FOR this resolution.
Rationale for our voting
Storebrand is committed to achieving net zero greenhouse gas emissions across all its assets under management by 2050. Short-term strategies back up our ambition, and by 2025 emissions will be reduced by 32%. In Storebrand’s view, one of the best ways to effect change is to be an active owner and to engage with portfolio companies. A particular focus has been given to top emitters generating the most emissions in our portfolios where Equinor has been identified as a priority company for engagement, due to our holdings size and the company’s primary activities, emissions footprint, and risk profile.
In our engagement with Equinor, we have highlighted our expectations around science-based target setting, supported by a strategic plan and corresponding capex budgeting. We applaud Equinor’s sectoral leadership in many aspects, including in relation to its scope 1 and 2 emissions performance.
However, we believe that the company’s current strategy and capex plans do not align to its overarching commitment to the goals of the Paris Agreement, which we also raised a head of Equinor AGM in 2022 when the company presented its Transition Plan. We acknowledge the complexity of the matter, including the energy security in Europe, but have asked Equinor to be more transparent on capex plans and absolute emission targets, preferably accompanied by sensitivity analyses on shareholder value impacts.
