Norges Bank discloses votes FOR climate change shareholder resolutions at Exxon/Chevron

Influential investor announces voting intentions ahead of AGMs

Norges Bank Investment Management (NBIM), the arm of the Norwegian central bank which manages the assets of the giant Government Pension Fund, has announced it will be voting FOR shareholder proposals on climate change at US oil majors Exxon Mobil and Chevron.

Norges only began pre-disclosing its voting intentions last year and the announcements are still relatively rare.

At Exxon, NBIM says it will support the resolution submitted by the New York State Common Retirement Fund and co-filed by the UK’s Church Commissioners calling for it to publish an annual assessment of long-term portfolio impacts of public climate change policies.

“The reporting should assess the resilience of the company’s full portfolio of reserves and resources through 2040 and beyond and address the financial risks associated with such a scenario,” the proposal states, in a motion inspired by the ‘Aiming for A’ “supportive but stretching” resolutions that achieved almost unanimous shareholder backing at peers BP, Shell and Statoil last year and at mining firms this AGM season.

The Church Commissioners and CCLA Investment Management, the UK charity fund manager, last week took the unusual step of writing to fellow Exxon shareholders urging them to vote for their resolution (Proposal No. 12).

They pointed out that institutional investors with over $6trn in assets under management had already declared support for this proposal, including major fund managers and pension funds Amundi, AXA Investment Management, BNP Paribas Investment Partners, CalPERS, Legal & General Investment Management, Natixis Asset Management, New York City Pension Funds and Schroders.Exxon is advising its shareholders to vote against the resolution, saying that while it agrees with the importance of assessing the resiliency of its resource portfolio, it believes its current processes “sufficiently test the portfolio to ensure long-term shareholder value”.

Norges said today: “We encourage companies to consider the sensitivity of their long-term business strategy and profitability to different future regulatory and physical climate scenarios. The scenarios should include low-emissions scenarios incorporating countries’ expressed national, bilateral or international climate commitments and ambitions. One such scenario should consider the successful implementation of policies to limit the likelihood of temperatures rising above 2 degrees Celsius.”

The giant fund will also support the shareholder resolutions calling for an independent chair (submitted by the Ellen M. Higgins Trust 1959) and proxy access (New York city funds).

It is also withholding its vote from Exxon Mobil CEO Rex Tillerson, although it is supporting the vote to ratify named executives’ pay. It is also voting against the proposal for a climate expert on the board (Province of St. Joseph of the Capuchin Order), policy to limit global warming to 2°C (Sisters of St. Dominic of Caldwell New Jersey) and on hydraulic fracturing (Park Foundation).

At Chevron, meanwhile, Norges has declared its support for a shareholder proposal on climate strategy. It is also voting against Chairman and CEO John Watson. It is not supporting shareholder resolutions on lobbying, GHG reduction targets and board environmental expertise.

Both companies hold their annual meetings on May 25.