Norway’s oil fund says firms mismanaging climate could face exclusion

Norway’s $1.4 trillion sovereign wealth fund says it is prepared to start dropping companies for mismanaging climate risk starting next year, adding to the decarbonization pressure that activist shareholders are already piling on firms.

It comes shortly after the world’s the biggest investment fund said it would vote for shareholder proposals at Chevron and Exxon Mobil‘s respective annual meetings on Wednesday.

The resolutions seek to compel the U.S. oil majors to align their climate targets with the landmark Paris Agreement and commit to absolute carbon emission cuts by 2030.

Norway’s oil fund had refused to back similar shareholder proposals tabled in recent weeks at European oil majors, such as BP and TotalEnergies.

The fund says it assesses every shareholder proposal individually and notes there are differences between how European and U.S. oil majors tackle the Scope 3 emissions generated by customers’ use of their oil and gas.

“We are a particularly active owner when it comes to climate,” Carine Smith Ihenacho, chief governance and compliance officer at Norges Bank Investment Management, told CNBC via telephone.

Established in the 1990s to invest the surplus revenues of Norway’s oil and gas sector, the fund said last year that it would take a tougher line on companies that failed to adopt credible climate plans.

“We clearly said it is in our long-term interest that the companies in our portfolio will get to net zero by 2050 because, for our financial returns in the long term, we think that will be beneficial,” Ihenacho said, reflecting on the fund’s 2025 climate action plan.

“As an active owner, we really want to influence and push the companies towards setting net-zero 2050 targets and also push them towards having credible transition plans. By that, we mean science-based transition plans,” she added.