Norwegian investors ramp up voting engagement with oil and gas supermajors

Norway’s five largest investors, including its largest pension fund €67bn KLP, supported nearly all climate activist resolutions at oil and gas supermajors during the last annual general meeting (AGM) season, a new voting report has revealed.

The report by climate activist group Follow This analysed the voting behaviour of €1.4trn Norges Bank Investment Management (NBIM), €251bn Nordea, €106bn Storebrand, €83bn DNB and KLP at the 2023 AGMs of Shell, BP, TotalEnergies, ExxonMobil and Chevron.

It found that the only investor to vote against some of Follow This’ climate resolutions was NBIM, which backed climate resolutions at ExxonMobil and Chevron but not at Shell, Total and BP.

Norway's activist stance on climate comes despite the fact that the majority of the Norwegian economy has been driven by oil since the 1970s, with NBIM being the country’s sovereign-wealth fund that invests its oil and gas production revenues.

Follow This stated that this voting behaviour stands in contrast to other asset owners in Europe, who believe in either engagement or divestment as a way to put pressure on oil and gas supermajors to decarbonise.

For example, large investors in the UK voted against climate activist resolutions in 2023, favouring an approach based on engagement behind the scenes, while asset owners in the Netherlands, such as €237.8bn PFZW, have divested away from oil.

Looking ahead to Shell’s AGM next month, Follow This called on investors to support its climate resolution at the meeting, particularly NBIM who voted against it in 2023.

Mark van Baal, founder of Follow This, stated: “We hope that Norges Bank will also vote in favour of the climate resolution at Shell this year. Their vote will send a strong signal to the boardrooms of all oil majors including Exxon's.

“Big oil will only change if shareholders vote for change. Investors who divest, transfer their shares to less responsible shareholders, enabling Big Oil to drill for more oil and gas with disastrous consequences for climate and economy.

“Engagement is only effective when it is backed up by voting. We ask investors to put their vote where their mouth is.”

Shift away from fossil fuels?

However, despite investors such as NBIM voting for climate resolutions at oil and gas companies’ AGMs, the sovereign wealth fund has also started to shift away from fossil fuels.

In 2021, NBIM sold its whole portfolio of companies relating to oil exploration and production, following a 25% loss on its oil and gas holdings in 2020, sending signals to the market that perhaps the Norwegian economy was shifting focus away from fossil fuels.

In addition, NBIM’s latest responsible investment report revealed that its had divested from 86 companies following assessments on ESG risk. More specifically, to reduce climate change risks, it divested from 11 companies.

The report also picked up NBIM's engagement with Shell over reducing the environmental damage of oil spills in the Niger Delta. However, this engagement with the oil and gas supermajor has come under fire from campaigners, being labelled as “naïve” and overly reliant on information provided by the oil giant.