Institutional investors call Equinor to account on climate

Equinor’s strategy to grow oil and gas production is facing renewed scrutiny, following a shareholder resolution filed by Sampension and Folksam – two major pension providers in Denmark and Sweden – along with ACCR.

The resolution asks Equinor’s Board of Directors to explain how it assesses the inconsistency between the company’s planned increase in oil and gas production, and the majority shareholder’s expectation that the company should be operated in line with the goals of the Paris Agreement.

Equinor is majority owned (71%) by the State of Norway. At the 2023 Equinor Annual General Meeting (AGM), the Ministry of Trade, Industry and Fisheries said it expects the company to set targets and implement measures to reduce greenhouse gas emissions in line with the Paris Agreement.

The resolution co-filers are concerned that the company’s new strategic direction, with an increased focus on upstream oil and gas exploration and expansion, is materially inconsistent with Paris Agreement alignment.

In addition, investors are also concerned about the inadequate returns generated by the international oil and gas segment in the past, which appears in conflict with the State of Norway’s goals for Equinor to deliver the highest possible returns over time in a sustainable manner.

Read the resolution and supporting statement here.

Read ACCR’s Investor Briefing here.

Emilie Westholm, Head of Responsible Investments and Corporate Governance at Folksam, said:

“This resolution draws attention to the fundamental inconsistencies between Norway’s expectations and Equinor’s oil and gas expansion plans. As a net zero investor, we hope this resolution will bring more clarity on Equinor transition work, including how it aims to achieve its long-term net zero target.”

Jacob Ehlerth Jørgensen, Head of ESG, Sampension said:

"With its updated strategy, Equinor is turning down its green ambitions and turning up its fossil fuel ambitions. That is simply the wrong path to take at a time when climate change is accelerating.

“We understand that investing in renewables is difficult in the current environment. But if Equinor can’t make its renewables business profitable, it should return excess capital to its investors – not double down on fossil fuel projects that clearly run counter to society’s climate goals.”

Brynn O’Brien, Executive Director, ACCR, said:

“Unlike other companies, Equinor has the support of its majority shareholder to make the required changes to meet global climate goals. But even with that powerful message, company management has been unresponsive to date. The Board’s statement opposing the resolution repeats that pattern by failing to engage with the substance of the resolution.

“Other shareholders have reasonable expectations that the company would move towards alignment with the expectations of the majority shareholder. Instead, Equinor has gone in the opposite direction.

“Sampension and Folksam, on behalf of their beneficiaries, are showing strong leadership in a challenging time. This is the kind of forceful stewardship all pension fund and insurance beneficiaries around the world must undertake, so that their members can have a livable world and stable financial system to retire into.

“We are currently on track for levels of warming that will mean permanent value destruction across diversified portfolios and financial markets, on a timescale that is relevant to pension fund and insurance beneficiaries.”

ABOUT FOLKSAM

Founded in 1908, Folksam is one of the largest insurance and pension providers in Sweden. We insure every second family home and person in Sweden and are also one of the largest asset owners in the country with EUR 59 billion in assets under management at the end of 2024. As a pioneer within responsible investments, Folksam has spent more than two decades engaging with our portfolio companies on issues related to climate change and the environment, human rights and anti-corruption. Folksam is headquartered in Stockholm, Sweden. For more details, please visit www.folksam.se.

ABOUT SAMPENSION

Sampension is one of Denmark’s largest pension providers, with total assets exceeding EUR 40 billion and approximately 355,000 customers and members. Sampension is customer-owned and manages occupational and corporate pension schemes for Sampension Livsforsikring, the Pension Fund for Architects & Designers, the Pension Fund for Agricultural Academics and Veterinary Surgeons, and ISP Pension.