In a joint statement prepared with investors participating in Climate Action 100+, Equinor announces new steps to demonstrate further industry leadership on climate change and strong support for the goals of the Paris Agreement.
Equinor has climate at the core of its business strategy and has set short-, medium- and long-term climate-related targets for the company’s emissions to drive performance. The joint statement builds on this work, and Equinor commits to set out climate-related ambitions also beyond 2030. Equinor will continue to report on climate related risks and opportunities in line with the TCFD recommendations. From 2019 Equinor will assess its portfolio, including new material capital expenditure investments, towards a well below 2°C scenario. If and when a relevant well below 2°C scenario is available, with necessary price assumption, Equinor will include this in its overall stress testing.
“Equinor is developing as a broad energy company, with oil and gas, renewable energy and low carbon solutions as integrated parts of our business. We see our low carbon strategy as a competitive advantage which creates long term value for our shareholders. The actions we announce today make us even more competitive in the energy transition, and support the goals of the Paris Agreement. We welcome the constructive engagement and appreciate the collaboration with investors as part of Climate Action 100+,” says Eldar Sætre, President and CEO of Equinor.
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.
The announcement follows other agreements reached through Climate Action 100+ with Shell and BP, in addition to companies in other sectors. Taken together, the commitments made demonstrate the growing influence of shareholder engagement through the initiative.
Climate performance is a key performance indicator in Equinor and part of the basis for executive remuneration. Equinor will further strengthen the link between its climate-related targets and remuneration for senior executives and employees once the new targets have been defined in 2020.
Equinor is committed to continue to play an active and positive role in society’s decarbonisation, beyond its own operational emissions, through its engagement, technology, innovation, operations and investments. Equinor has already been at the forefront by reporting the company’s emissions and carbon intensity, and from next year the company will also report on overall estimated carbon intensity of energy products and services provided.
Climate change calls for new solutions and partnerships. Equinor promotes transparency and cooperation, and recognises the importance of ensuring that its membership in relevant trade associations does not undermine the company’s support for the goals of the Paris Agreement. Equinor commits to undertake a comprehensive review of its memberships in industry associations that hold an active position on climate and energy policy.
In the statement, the institutional investors recognise that: “Equinor has demonstrated leadership on climate change in a number of important areas. Its corporate strategy and recent name change provide clear signals of its intent to develop as a broad energy company and shift towards a greater proportion of low-carbon assets. Equinor has invested in renewables and low-carbon energy technologies, has made positive progress in its approach to emission and resource management and has played an important role in promoting implementation of the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD). We acknowledge the efforts made by Equinor to date to embed climate change into its strategy, risk assessments, investment decisions, operating decisions and disclosures.”
The investors in question – UBS Asset Management, HSBC Global Asset Management and Storebrand Asset Management – led engagement with Equinor as part of Climate Action 100+.
“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,” Stephanie Pfeifer, a member of the global Climate Action 100+ Steering Committee and CEO, Institutional Investors Group on Climate Change (IIGCC), explains.
About 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 USD 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; 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.