OSLO (Reuters) - Norway's $1.6 trillion sovereign wealth fund, the world's largest, is falling short on its climate ambitions by failing to back multiple shareholder proposals pushing oil companies to cut their greenhouse gas emissions, a non-governmental organization said in a report said on Monday.
The fund pools the Nordic country's state revenues from oil and gas production. Since 2022 its aim is for the 9,000 companies it invests in globally to reach net-zero greenhouse gas emissions by 2050, in line with the Paris Agreement.
As part of its strategy, the fund's management, Norges Bank Investment Management (NBIM), has set expectations for corporate boards on climate change and votes at annual general meetings on this issue.
It says it engages with companies in multiple ways, including via voting on shareholder proposals, and in severe cases can divest from companies if they fail to respond.
The fund is failing short, however, on that ambition, according to a report by Norwegian NGO Framtiden i vaare hender (the Future in our Hands) that was shared with Reuters ahead of its publication on Monday.
The report analysed the fund's voting record last year on 16 climate resolutions at nine oil majors, including BP (NYSE:BP), Shell (LON:SHEL), TotalEnergies (EPA:TTEF), Chevron (NYSE:CVX) and ExxonMobil (NYSE:XOM).
It found that the fund supported seven such resolutions and backed strategies the group said were "climate harmful" in the remaining nine of those 16 cases.
"NBIM has, at times, opposed critical shareholder resolutions on climate during annual general meetings. This misalignment between NBIM's climate engagement strategy and its actual voting behaviour signals a troubling gap in action," the report said.
NBIM also voted against all climate resolutions at the annual general meetings of four oil majors - BP, Shell, TotalEnergies and Marathon - that have been flagged by CA100+, an investor-led initiative that advocates for the largest emitters to tackle their emissions, as companies that fall short in their efforts to tackle climate change.
"NBIM's failure to endorse climate resolutions in line with internationally agreed goals undermines its role as a steward of sustainable finance," said the report.
The fund said it assessed all shareholder proposals based on a specific framework.
"Our framework considers three elements: materiality, prescriptiveness and relevant company- or market-specific circumstances," the fund said in a statement emailed to Reuters.
"This means that we might not support a proposal related to a material topic such as climate change if it, for instance, seeks to micromanage a company's strategy, or if the company already meets our expectations."
It often discuss its voting intention directly with companies, ahead of AGMs.
"This allows us in some instances to communicate that we find an issue raised in a shareholder proposal to be important, even if it contains certain wording that lead us to vote against," the fund said.