The Norwegian state, which owns two-thirds of the country’s biggest oil company Equinor ASA, is debating how to use its stake in the future, with the biggest party in parliament arguing in favor of a more activist role.
Espen Barth Eide, a lawmaker for the Labor Party, says there’s “room for a more explicit form of corporate governance” in the way Norway uses its Equinor stake. Parliament is debating the matter on Thursday, and the center-right government has so far signalled it disagrees.
Labor, which polls show is poised to win next year’s election, wants to make sure sustainability plays a bigger role in Equinor’s business model. Eide says Norway has tended to let Equinor’s board and management operate without any interference, which he argues isn’t a strategy most big private investors would go along with.
“If you’re an institutional owner in the private sector, you want to see documentation showing how much of your investment goes into the green shift, ESG and so forth,” Eide said in an interview.
Equinor has set emissions targets, but its track record on sustainability is far from clean. The company acknowledged this year that it invested too much in U.S. shale, and that it failed to monitor the effect its investments were having on the environment. The company has also said it regrets investing in Canadian oilsands. Equinor ended up losing more than $20 billion on its U.S. investments.
Eide said that “the issue of reputation and public relations” is part of why the state should be more involved in how Equinor runs its business.
The idea is to make sure they’re not “invested in anything problematic,” he said. “This is a mega-trend in all western investments. All private owners are increasingly concerned with this.”
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