Investors welcome Equinor’s strengthened commitments on climate change
Global energy company Equinor has committed to take significant additional action on climate change. This is the outcome of engagement with investors – led by UBS Asset Management, HSBC Global Asset Management and Storebrand Asset Management – as part of Climate Action 100+. Involving over 300 investors, with more than $33 trillion in assets under management, this is an initiative to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change.
In a joint statement agreed through engagement with the investors, Equinor is committed to pursuing a business strategy consistent with the goals of the Paris Agreement1. The company will set out new climate-related ambitions beyond 2030 for its business activities. It will publish its updated targets and ambitions in 2020, and thereafter report annually on the progress to achieve them. Equinor will also regularly review its climate related ambitions, targets and KPIs.
Additional steps to be taken include assessing its portfolio against a below 2°C climate scenario and intending to strengthen the link between remuneration and climate-related targets. Equinor will also undertake a review of its membership in industry associations that hold an active position on climate and energy policy.
Today’s announcement follows other agreements reached through Climate Action 100+ with Shell and BP, in addition to companies in other sectors2. Taken together, the commitments made demonstrate the growing influence of shareholder engagement through the initiative.
Stephanie Pfeifer, a member of the global Climate Action 100+ Steering Committee and CEO, Institutional Investors Group on Climate Change (IIGCC), explains: “Equinor is one of an emerging group of oil and gas majors that understand the need to act on climate change to secure their place in a cleaner global economy. Building on the welcome steps it has already taken, investors will continue to work with Equinor on fully aligning its business with the goals of the Paris Agreement. They also expect others in the sector to follow its lead or face the consequences of ignoring some of their largest shareholders.”
Speaking as one of the leads of the Climate Action 100+ investor dialogue with Equinor, Valeria Piani, Strategic Engagement Lead for UBS Asset Management, explains: “We value in depth engagement discussions with companies which help drive both long-term value and sustainable innovation addressing the risks and opportunities presented by climate change.”
“Equinor and investors have together defined an ambitious pathway which will see the company play an even more active role in the transition to a lower carbon economy. We are very pleased to have reached this agreement with the company and will continue our collective engagement with them as they deliver on these crucial commitments.”
Storebrand Asset Management, Norway’s largest private asset manager with over $80 billion in assets under management, is one of the three investor organisations leading Climate Action 100+ engagement with Equinor.
Odd Arild Grefstad, Group CEO, Storebrand Group, explains: “As an investor, we strongly believe in active ownership by cooperating closely with companies and other investors. The results from the engagement with Equinor has further strengthened our conviction.”
“It’s highly encouraging to see that major companies like Equinor are taking critical steps in the right direction to align their strategy with the Paris Agreement. We are delighted that Equinor are committed to building a low carbon future. We expect other companies in the sector to be inspired and to follow the leadership signal set by Equinor.”
Thomas O’Malley, Global Head of Corporate Governance, HSBC Global Asset Management, adds: “We welcome the important commitments Equinor has made as part of our collective engagement. Climate change is a significant challenge and the company’s commitments on scenario analysis, strategy and reporting will help provide transparency to shareholders.”
Equinor’s commitments, as detailed in the joint statement with investors, include:
- Reviewing existing climate-related targets up to 2030 and setting out new ambitions beyond 2030. Targets currently cover operated emission reductions, methane intensity and upstream carbon intensity, as well as a 2020 target for low-carbon R&D expenditure.
- Intending to further strengthen the link between climate related targets and remuneration for senior executives and employees. Equinor will seek to align remuneration for executives and employees across its business with updated short, medium and long-term climate-related targets and ambitions once defined in 2020.
- Undertaking a comprehensive review of industry association memberships that hold an active position on climate and energy policy. This includes seeking to disclose any material inconsistencies and potential actions taken in that regard by the first quarter of 2020.
- To report in line with final recommendations of the Task Force on Climate-related Financial Disclosures3.
- From 2020 Equinor will report overall estimated carbon intensity of energy products and services provided and explore additional approaches to drive decarbonisation along the company’s value chain and the end use of products (scope 3 emissions).
- To assess its portfolio, including new material capital expenditure investments, in relation to a well below 2°C scenario from 2019 onwards.
Investors will continue engagement with Equinor to support the company and ensure delivery of the commitments made.
– Ends –
Climate Action 100+ (via IIGCC as a coordinating partner organisation): tfern@IIGCC.org & +44 (0)7867 360 273.
UBS Asset Management: email@example.com & +44 (0)207 901 5538.
Storebrand Asset Management: Margrethe.Assev@storebrand.no & +47 95 15 50 56.
HSBC Global Asset Management: firstname.lastname@example.org & +44 (0) 207 860 3140.
Equinor: Bård Glad Pedersen, vice president Media Relations: email@example.com & +47 91801891.
Notes to Editors:
1. See this link for Equinor’s equivalent announcement and to view a copy of the joint statement agreed with investors.
2. Climate Action 100+ investor agreements with other companies to date include Shell, BP and Glencore, among others. See below for more on Climate Action 100+.
3. The Task Force on Climate-related Financial Disclosures, was established by the FSB in December 2015 to develop disclosure recommendations for use by companies in providing information about their climate-related financial risks. See here for more information.
Climate Action 100+: Climate Action 100+ is an investor initiative to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change. More than 320 investors with more than $33 trillion in assets collectively under management are engaging companies on improving governance, curbing emissions and strengthening climate-related financial disclosures. The companies include 100 ‘systemically important emitters’, accounting for two-thirds of annual global industrial emissions, alongside more than 60 others with significant opportunity to drive the clean energy transition.
Launched in December 2017, Climate Action 100+ is coordinated by five partner organisations: Asia Investor Group on Climate Change (AIGCC); Ceres (Ceres); Investor Group on Climate Change (IGCC); Institutional Investors Group on Climate Change (IIGCC) and Principles for Responsible Investment (PRI). These organisations, along with five investor representatives from AustralianSuper, California Public Employees’ Retirement System (CalPERS), HSBC Global Asset Management, Ircantec and Manulife Asset Management, form the global Steering Committee for the initiative. Follow us on Twitter: @ActOnClimate100.
IIGCC: The Institutional Investors Group on Climate Change (IIGCC) is the European forum for investor collaboration on climate change and the voice of investors taking action for a prosperous, low-carbon future. IIGCC has 170 members, mainly pension funds and asset managers, across 11 countries, with over €23 trillion assets under management. IIGCC’s mission is to mobilise capital for the low-carbon transition by collaborating with business, policymakers and fellow investors.
HSBC Global Asset Management: HSBC Global Asset Management, the investment management business of the HSBC Group, invests on behalf of HSBC’s worldwide customer base of retail and private clients, intermediaries, corporates and institutions through both segregated accounts and pooled funds. HSBC Global Asset Management connects HSBC’s clients with investment opportunities around the world through an international network of offices in 26 countries and territories, delivering global capabilities with local market insight. As at 31 December 2018, HSBC Global Asset Management managed assets totalling US$451bn on behalf of its clients. For more information see www.global.assetmanagement.hsbc.com. HSBC Global Asset Management is the marketing name for the asset management businesses of HSBC Holdings plc.
Storebrand Asset Management: Storebrand Asset Management is a leading player in the Nordic market and a pioneer within the field of sustainable investments. Storebrand Asset management has been at the forefront of sustainable investing since the mid 1990’s and has to date one of the most experienced ESG teams in the Nordic region. Its group-wide sustainable investment policy applies to all assets under management. Storebrand Asset Management manages over $80 billion.
UBS Asset Management: Asset Management is a large-scale asset manager with a presence in 23 countries. It offers investment capabilities and investment styles across all major traditional and alternative asset classes to institutions, wholesale intermediaries and wealth management clients around the world. It is a leading fund house in Europe, the largest mutual fund manager in Switzerland, the second largest fund of hedge funds manager and one of the largest real estate investment managers in the world. Invested assets totaled US $781 billion as of 31 December 2018. UBS AM is part of UBS Group. For more information see www.ubs.com/am.