OSLO: Norway’s sovereign-wealth fund, the world’s biggest, said it would vote in favor of a proposal to require oil companies Royal Dutch Shell PLC (RDSA.LN) and BP PLC BP, +1.12% to report annually on the risks associated with climate change, in the fund’s first announcement of its voting intensions.
As a long-term investor, we believe that the identification of future scenarios for climate regulation, carbon pricing, and environmental conditions is a useful tool to support strategic decision-making,” said Petter Johnsen, Chief Investment Officer for Equity Strategies. “We thereby support these resolutions.”
The $885 billion fund, managed by Norges Bank Investment Management, or NBIM, said last year that it planned to announce its voting intentions ahead of annual shareholder meetings for a selected number of companies and for certain fundamental issues, partly to boost transparency.
The resolutions submitted to BP and Shell’s annual general meetings asked for further information on the risks and opportunities associated with climate change, NBIM said. The companies would be required to include the climate information in annual reporting as of 2016, it said.
The fund said it commended the boards of BP and Shell for recommending support for the resolutions. The fund held a 2.16% stake in BP and a 2.02% stake in Shell at the end of 2014.
The Norwegian fund has stepped up the transparency of its voting in recent years, and publishes its voting records online on a running basis, compared with once a year previously. The fund voted on 10,519 general meetings last year, supporting 85% of the board proposals.
NBIM has said it will be engaging more with companies and their boards in line with it taking more material stakes in more companies. The fund held more than 2% stakes in 1,205 companies and stakes exceeding 5% in 57 companies at the end of 2014, from 1,088 companies and 45 companies respectively a year earlier.
The fund has a 10% cap on its ownership stakes in any given company.
The fund manager recently updated its expectations to companies’ climate change strategies. NBIM said it expected companies to consider how their business strategies relate to different scenarios, including a successful global deal to limit global warming to 2 degrees above pre-industrial levels.
