Norway's wealth funds falls short of climate ambitions according to NGO
A non-governmental organization said that the world's biggest sovereign wealth fund has failed to meet its own climate goals by not voting in favor of shareholder resolutions this year during AGM season.
The fund, which has a value of $1.8 trillion, pools revenues from the Nordic states' oil and gas production. It aims to have the 9,000 companies that it invests in reach zero greenhouse gas emissions in 2050 in accordance with the Paris Agreement.
Norges Bank Investment Management, the fund management company, has set expectations for corporate boards and voting at the annual general meeting on climate change as part of their strategy.
It claims to engage with companies through multiple means, including voting on shareholder proposals. In severe cases, it can divest if companies fail to respond.
According to a report from the Norwegian NGO Framtiden i vaare hender, which was reviewed ahead of its Monday release, this fund falls short on this ambition.
The report examined the voting records of the fund on 21 climate-related resolutions in 17 companies, including Shell, BP, and TotalEnergies, during this year's season of annual general meetings.
The fund, it was found, voted against 17 of 21 climate resolutions that were deemed to be important by three climate lobbying groups. Instead the fund aligned itself with the recommendation of the management of the concerned companies. The fund supported four of the 21 climate resolutions.
Lucy Brooks is an advisor at the NGO on sustainable finance. She said that the fund has consistently voted against management in some cases, like excessive executive compensation, but not climate change.
She said that "they are much less consistent" when it comes down to voting on climate resolutions at the companies with the greatest influence over the energy transition from fossil fuels.
They do not align their votes with their own climate action plans.
NBIM stated that it engages with top emitters through company meetings and voting at AGMs, and often considers these tools in combination.
NBIM stated that it analyzes three factors when deciding whether or not to support a shareholder's proposal: its materiality, its prescriptiveness, and the scope of the proposal.
Eivind FLIFLET, the head of NBIM's Active Ownership Department's environmental team, said that "this detailed analysis often leads us to withhold support for proposals which at first glance raise significant topics and contain language aligned with expectations."
We acknowledge that different companies have different perspectives on what it means to align with the Paris Agreement goals and closely follow the developments and standards.
In 2023, NBIM voted on 31% of shareholder sustainability proposals, which is roughly the same percentage as it did in the first half 2024.
(source: Reuters)
