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Exclude ExxonMobil from “Oljefondet”

The Norwegian Climate Foundation requests The Government Pension Fund Global to exclude ExxonMobil – the worlds largest stocklistet oilcompany. Exxonmobil is a natural first move when the Council on Ethics appointed by the Ministry of Finance starts executing on its new “climate paragraph”, says Lars-Henrik Paarup Michelsen CEO of The Norwegian Climate Foundation.

Exxon, bilde av Minale Tattersfield, CC-by

The Norwegian Climate Foundation has sendt a letter to the Council of Ethics within The Government Pension Fund Global where they request that ExxonMobil is excluded from the funds investment portfolio. Head of the Council of Ethics Johan H. Andresen has stated that companies relying heavily on fossil fuel is among the categories which is to be considered under the new rule.

DOWNLOAD THE LETTER HERE

The reason why The Norwegian Climate Foundation choose Exxon is the company’s history and practice.

– There is no doubt that ExxonMobil

Det kan ikke være tvil om at ExxonMobil satisfies the demands of the ethical guidelines for a company to be excluded. If this does not apply for Exxon then which company does it apply for, asks Paarup Michelsen.

 “Companies may be put under observation or be excluded if there is an unacceptable risk that the company contributes to or is responsible for (…) d) acts or omissions that on an aggregate company level lead to unacceptable greenhouse gas emissions.”

When excecuting the new rule the serious climate situation must be taken in to consideration, Paarup Michelsen claims.

The letter states:

«The climate situation must be described as dramatic. It is far from certain that the goals in the Paris Agreement of keeping temperature changes “well below” 2 degrees or closer to 1.5 degrees can be reached. By the end of the century the average temperature may have increased far more, possibly around 4 degrees. Even a 2-degree increase represents a dangerous development, with major harmful effects. Without prompt and efficient action, we are heading towards a future climate catastrophe. Today this knowledge is widely available.

 The heads of the oil companies know this. The members of the Council on Ethics know this.

 When “our shared assets” are invested in companies that over the years have significantly contributed to this catastrophe and continue to do so, this is highly objectionable and ethically unacceptable.

The on-going and future climate changes pose a major threat to current generations and to our descendants. Acknowledgement of the gravity of the situation intensifies the demands made on all agents in society, including the Government Pension Fund Global and its Council on Ethics.

 The Norwegian Climate Foundation points to ExxonMobil’s current and previous behaviour.

  • ExxonMobil has significant responsibility for historical, current and future greenhouse emissions, and have a highly carbon-intensive portfolio.
  • ExxonMobil has deliberately attempted to mislead public opinion and decision makers regarding the gravity of climate change.
  • ExxonMobil rejects all attempts from shareholders (and others) who wish to influence the company to take environmental concerns more seriously and adapt its operations in accordance with the aims of the Paris Agreement.
  • ExxonMobil is under investigation for having misled investors and the public, but show little willingness to cooperate with the government.

Measures to reduce greenhouse gas emissions in line with the Paris Agreement pose a significant threat to ExxonMobil’s assets. The oil sand operations in particular are at serious risk, as evidenced by the fact that the company recently had to remove 3.5 billion barrels from its reported reserves. Competition from less carbon-intensive petroleum reserves and increasingly cheap renewable energy could reduce the value of ExxonMobil’s operations.

If ExxonMobil continues its business according to the same pattern, the company’s operations will contribute greatly to the failure of all scenarios that allow the limiting of global warming to two degrees.

– Exxon are actively betting against the climate policy behind the Paris Agreement, says Paarup Michelsen.

For the Government Pension Fund Global it is particularly relevant – and worrying – that Exxon rejects proposals and resolutions that call for greater transparency and awareness of climate risks – that is, the question of how the company’s operations will be affected in a situation where stricter climate policies and technological change affect the company’s business.

The Norwegian Climate Foundation asks that the Council on Ethics apply the provisions in section 3 d) of the ethical guidelines to ExxonMobil and exclude the company from the Government Pension Fund Global’s portfolio. This will help set a precedent to exclude also other companies, across carbon-intensive sectors, that:

  • have been, are currently and will continue to be responsible for major greenhouse gas emissions.
  • have worked or are working to prevent or impede political efforts to reduce greenhouse gas emissions, including by actively spreading misinformation about the gravity of climate change.
  • build their future business on the expectation that the aims of the Paris Agreement will not be reached.
  • Reject initiatives by shareholders and others calling for greater transparency around climate reporting and climate risks

Such criteria’s can set an example to exclude other companies within coal, concrete and other sectors where emissions are high, according to Paarup Michelsen.

The Government Pension Fund Global «climate paragraph»
From 1. January 2016 the guidelines for observation and exclusion changed to also include greenhouse gas emissions. According to § 3 in the new guidelines “Companies may be put under observation or be excluded if there is an unacceptable risk that the company contributes to or is responsible for (…) d) acts or omissions that on an aggregate company level lead to unacceptable greenhouse gas emissions.” Retrieved from https://www.nbim.no/en/the-fund/governance-model/guidelines-for-observationand-exclusion-from-the-fund/

Source: Council of Ethics

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