Norwegian oil and gas major Equinor has committed to take “significant additional action” on climate change, according to institutional investors who led engagement with the company as part of the collaborative initiative Climate Action 100+.
In a joint statement with the investors the renamed Statoil said it would set climate-related “ambitions” beyond 2030 for its business activities and strengthen the link between its climate-related targets and remuneration for senior executives and employees.
Equinor already has climate-related targets for emissions from its operations by 2030 and a 2020 target for low carbon research and development expenditure.
The company also committed to assess its portfolio, including new material capital expenditure, against a “well below” 2°C warming scenario.
“If and when a relevant well below 2°C scenario is available, with necessary price assumptions, Equinor will include this in its overall stress testing,” the statement added.
A spokesperson for the investors leading the engagement said that institutional investors were asking the International Energy Agency to issue a “beyond 2°C” scenario “with enough granularity and price assumptions to allow Equinor and other companies to stress test their portfolios on a quantitative basis against a scenario aligned with the Paris agreement in a way that is comparable across regions”.
HSBC Asset Management, Storebrand Asset Management and UBS Asset Management led the engagement with Equinor.
Odd Arild Grefstad, CEO of Storebrand Group, said the company was taking “critical steps in the right direction”.
Valeria Piani, strategic engagement lead for UBS Asset Management, said: “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.”
The investors would continue their collective engagement with Equinor “as they deliver on these crucial commitments,” she added.
‘No’ to Scope 3 targets
The publication of the joint statement coincided with Equinor releasing its notice of its upcoming annual general meeting (AGM), in which it set out its recommendation that shareholders reject the climate change-related shareholder proposals that have been filed.
One of these is a resolution from Dutch campaign group Follow This that calls on the company to set targets that include emissions from the use of its products – so-called Scope 3 emissions.
Echoing the position expressed in the statement with the investors, Equinor said it was committed to playing an “active and positive role” in decarbonisation, but that “our activities do not include direct engagement with end users of products”.
Follow This’s Mark van Baal said oil and gas companies without Scope 3 targets “can never commit to the Paris Agreement”.
He said the campaign group hoped investors would vote for its resolution, saying it was the same one that “compelled Shell to set a climate ambition for Scope 3”.
Royal Dutch Shell is the only oil and gas major to have set emission reduction targets that include Scope 3 emissions, announcing the plans for these in a joint statement with investors in December.
Earlier this month Follow This announced it would be withdrawing its climate resolution for this year’s Shell AGM because it had agreed with major Dutch investors to give the company more time to align its targets with the Paris Agreement.
Climate Action 100+ investors have also reached agreements with Shell and BP. Today’s announcement about the outcome of their engagement with Equinor comes after several civil society groups called for more transparency and bolder action from the iniative’s co-ordinating organisations and signatory investors.