Equinor’s shareholder vote on its transition to low carbon matters to the world. If Equinor can’t meet its Paris alignment promises, what chance do other oil and gas companies have?
On 14 May shareholders in the Norwegian oil and gas major, Equinor, will vote on whether the company should increase the pace of its transformation to become a low-carbon energy leader. This vote matters not just to Equinor’s shareholders; it matters to the world.
For shareholders, the case for steadily winding down investment into future oil and gas production makes economic sense. The IEA now projects global oil and gas demand will peak before 2030[1]. The IEA sees demand for oil and gas falling 45% by 2050 given current announced climate policies. If the world adopts policies aligned with the Paris goals, demand destruction will reach 75% by 2050[2].
It is also important that Equinor pivots its strategy to align with the Paris Agreement goals. Failure to do so would likely exacerbate ongoing climate change, putting future economic growth and broad-based investment returns at risk.
At last year’s AGM, the Norwegian Government – which holds 67% of Equinor’s shares – published its expectations for Equinor in this regard:
“The state expects cf. Meld. St. 6 (2022-2023) – Greener and more active state ownership (white paper on the State’s direct ownership of companies) that: … ii) The company sets targets and implements measures to reduce greenhouse gas emissions in both the short and long term in line with the Paris Agreement, and reports on goal attainment. The targets shall be science-based when available.”
As long-term investors, Sarasin & Partners LLP, alongside co-filers Sampension of Denmark, the UK’s West Yorkshire Pension Fund and Dutch Achmea Investment Management, welcomed the largest shareholder’s clear steer to Equinor’s board.
This AGM, we hope the Norwegian government and other shareholders will join with us to reinforce this message to Equinor’s board. If Equinor, majority owned by a signatory and vocal supporter of the Paris Agreement, is unable to turn its promises of Paris alignment into concrete action, then what are the chances of other oil and gas companies doing so?
[1] IEA, “Oil and gas industry in Net Zero Transition”, November 2023; https://www.iea.org/reports/the-oil-and-gas-industry-in-net-zero-transitions
[2] ibid
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