The Norwegian oil fund is on the side of climate activists against ExxonMobil and Chevron

The world’s largest sovereign wealth fund is siding with climate activists against ExxonMobil and Chevron to try to change emissions policy after the investor came under pressure over its support for European oil and gas companies.

Norway’s $1.4 billion oil fund will support shareholder proposals at Exxon and Chevron’s annual meeting next Wednesday that the US oil and gas majors set targets to reduce greenhouse gas emissions from the use of their products.

This contrasts with the fund’s refusal to back similar proposals – aimed at ensuring global warming is limited to below 2°C to meet the Paris climate agreement – from European majors such as BP, Shell and TotalEnergies, France’s group whose annual meeting is Friday.

Carine Smith Ihenacho, the fund’s director of corporate governance, told the Financial Times that there is a difference between how European and American oil companies view so-called Scope 3 emissions targets, which occur when their products are burned or consumed.

“Exxon doesn’t really believe in the value of setting Scope 3 targets. We think the company should do this. Chevron, we think they are not ambitious enough in their transition plans. . . Both BP and Shell have good Scope 3 targets, they have good transition plans,” he said.

The Norwegian oil fund is one of the most influential investors, owning an average of 1.5 percent of all companies in the world.

But its push to be a leader in environmental, social and governance (ESG) investing has put it at odds with some of the world’s biggest companies and drawn criticism and hypocrisy from environmental groups.

Mark van Baal, founder of Follow This, a prominent activist group behind oil major shareholder proposals, said he welcomed the oil fund’s support for Exxon and Chevron but was “surprised” that BP, Shell and Total could not to do the same. .

“The fund has a huge responsibility. This vote threatens their credibility as stewards of the global economy. Basically they are telling Shell, BP and Total: they don’t have to cut their emissions this decade. We expect this omission to be corrected next year,” he added.

Ihenacho said the issue was not “black and white” and that one group was “hopeless” and the other “great”. But he emphasized that the major European oil companies are ahead in this matter.

Van Baal says BP and Shell have made “empty promises” for 2050 as European companies have taken “baby steps” against climate change. “It’s very easy to be a leader in a field of underdogs,” he added.

The Norwegian fund voted against some of its biggest stock holdings this year, including Apple and LVMH over executive pay, and JPMorgan and Goldman Sachs over merging CEO and chairman roles.

He also began filing his own shareholder resolutions on climate change at American companies.

But the fund, whose inflows come from Norway’s oil revenues, has faced accusations of hypocrisy for telling energy companies what to do when his country earns record sums from oil and gas.

Ihenacho responded that climate risk is a financial risk to the fund. “Our task is basically to create value for future generations, but in a responsible way.

“We have no opinion on Norwegian politics. When looking at how to create long-term value from a financial perspective, it makes sense for the fund to have companies that can live in a net zero society.”

Both Exxon and Chevron have called on shareholders to reject Follow This’s proposal, saying oil and gas companies will play an important role in the energy transition. “We believe that setting Scope 3 targets could have significant unintended consequences for society,” Exxon added.