A $91 billion asset manager dumps Exxon, Chevron on Climate

Norwegian life insurer Storebrand ASA has beefed up its climate policy, leading it to exit oil giants Exxon Mobil Corp. and Chevron Corp. and accelerate a full divestment from coal.

The move by the Oslo-listed company, which has about $91 billion under management, is another illustration of how investors are adjusting to the risks of climate change, putting pressure on fossil-fuel producers.

Storebrand has sold its holdings in Exxon and Chevron, chemicals giant BASF SE and miner Rio Tinto Group for their lobbying efforts against the Paris Agreement and climate regulation, it said in a statement. It also quit ConocoPhillips and Husky Energy Inc because of their investments in polluting oil sands.

The lobbying assessment is based on the companies’ official positions, the organizations they’re a member of and how much resources they’ve invested in climate work, Jan Erik Saugestad, the head of Storebrand Asset Management, said in an interview. Although Exxon and Chevron have joined the global Oil and Gas Climate Initiative, they’ve set no firm targets for cuts across their emissions, as opposed to European rivals.

Exxon and Chevron said in separate statements that they support the goals of the Paris Agreement and are investing in technology to reduce emissions. Exxon “is focused on the dual challenge of meeting the growing demand for energy and minimizing environmental impacts and the risks of climate change,” spokesman Casey Norton said by email.

Chevron is “carefully considering” a recent shareholder vote to increase disclosure on climate lobbying, spokesman Sean Comey said by email. The company is not always aligned with third-party organizations it works with “but it’s important for us to be part of conversations on challenging issues where there are multiple points of view.”

More oil divestments could follow, Saugestad said. European oil majors like BP plc, Royal Dutch Shell plc and Norway’s own Equinor ASA can’t “rest easy and continue with business as usual,” he said.

The new policy also bans companies that get more than five per cent of their revenue coal, a target Storebrand earlier planned to reach by 2026.

Small divestment

Divestments as a result of the new policy were completed this year, Saugestad said, declining to be more specific. At a total of $47 million, almost half related to Exxon and Chevron alone, they represent a small share of Storebrand’s assets.

“The most important for us is to send a clear signal that we expect that the companies will cooperate with us,” Saugestad said. “In a global context, we’re quite a small player. But we’re also in a leading global position on sustainable investments.”

Storebrand has been at the forefront of a campaign to put pressure on Brazil to protect the Amazon forest, bringing together funds with more than $4.6 trillion in assets. It’s also removed all oil investments from its Swedish unit.

© 2020 Bloomberg L.P.

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