Norway’s wealth fund voted against Shell climate target motion

OSLO (Reuters) – Norway’s $1 trillion wealth fund voted against a motion at Shell’s annual meeting urging the energy giant to set climate targets, despite a push the fund is making for more firms to do so.

Long-term investors with $10.4 trillion of assets under management, including banks BNP Paribas and HSBC, had called on Shell to set firm carbon emission targets in line with the 2015 Paris Agreement on climate change.

Tuesday’s motion was opposed by 95 percent of the company’s investors on Tuesday, including the Norwegian fund, whose spokesman said it believed companies were in a better position to set their own targets.

The world’s largest sovereign wealth fund had a 2.19 percent stake in Shell, worth around $6 billion, at end-2017 – its third-largest equity holding at that time.

It has announced a push for the 9,000 companies it invests in to disclose more non-financial data, such as the amount of climate gas they emit, so that it can evaluate the risk climate change can pose to its investments.

It also wants companies to have scenario analyses of how more heatwaves, droughts or floods might affect their earnings.

Asked to comment on the fund’s stance on the AGM motion, spokesman Thomas Sevang said: “We believe the companies are best positioned to set the specific targets in-line with their long-term strategy.

“Boards should integrate relevant climate change challenges and opportunities in their business management,” he added, reiterating the fund wanted firms “to take climate change into consideration and openly report on emissions.”

Like many of its peers, Shell has faced growing investor pressure to address the need to reduce fossil fuel burning, forcing it to seek a delicate balance with a need to secure growing returns from its traditional business.

In November, Shell outlined plans to halve carbon emissions from its operations and sales of its fuels by 2050, viewed as one of the most ambitious goals in the sector.

The fund said it had also voted in favour of the remuneration package of Shell Chief Executive Ben van Beurden, worth 8.9 million euros ($10.51 million) in 2017 and adopted by 75 percent of investors.

The fund declined to comment on Wednesday on why it voted that way.

Since 2017, the fund has called for executive pay packages to be simpler and more transparent and to not include long-term incentive plans.

So far in this AGM season, the fund has voted against a stock option plan for Tesla CEO Elon Musk, which would potentially be worth $2.6 billion to the electric carmaker’s founder.

It has also voted against the pay of Disney CEO Bob Iger, Christian Dior CEO Sidney Toledano, Peugeot CEO Carlos Tavares, Vinci CEO Xavier Huilliard and Vivendi CEO Arnaud de Puyfontaine.

Reporting by Gwladys Fouche, editing by Terje Solsvik, Ole Petter Skonnord and John Stonestreet