Major Investment Firm Dumps Exxon-Mobil, Chevron, Others For Opposing Climate Change Policies

Norway’s largest private asset manager has decided to block investments in Exxon-Mobil (XOM), Chevron (CVX) and other firms that it says are not doing enough – or are actively promoting their opposition -- to fighting climate change.

Based near Oslo, Storebrand said on Monday it also will prohibit investments in German chemical company BASF, Anglo-Australian mining giant Rio Tinto and American gas and electric utility Southern Co. (SO) since they lobbied against the Paris Agreement, which mandated the cutting of greenhouse gas emissions.

Storebrand had about $27.2 million invested in the five companies. The list of banned companies numbers 27. As of now, about one-third of all Storebrand's investments are fossil-free, the company added.

“We aim to be a leading provider of sustainable investment solutions,” said Jan Erik Saugestad, executive vice president of asset management at Storebrand. “With this strategy, we strengthen all the tools we as an investor have at our disposal. ... Climate risk is one of the biggest challenges facing the world and investors. Therefore, investors must move large amounts of capital to companies that deliver solutions to the climate crisis -- and away from companies that do not take climate risk seriously.”

Storebrand, which manages about $98 billion in assets, also vowed to have a net zero in greenhouse gas emissions from its investment portfolios by 2050 at the latest.

“We are concerned about the effect of climate change on ecosystems, societies and economies, and thus our own portfolio companies,” Saugestad added. “Fortunately, we also have significant influence, and can help accelerate decarbonization in the global economy.”

From now on, Storebrand will align its investments with “scientific consensus” and the “obligations of the Paris Agreement.”

The asset manager will not only exclude companies that actively lobby against the Paris Agreement and climate regulations, but also companies that generate more than 5% of revenues from coal and oil sands.

“We need to accelerate away from oil and gas without deflecting attention on to carbon offsetting and carbon capture and storage. Renewable energy sources like solar and wind power are readily available alternatives,” Saugestad said, the Guardian reported. “The Exxons and Chevrons of the world are holding us back. This initial move does not mean that BP (BP), Shell (RDS-A), [Norway’s state-owned oil company] Equinor and other oil and gas majors can rest easy and continue with business as usual even though they are performing relatively better than U.S. oil majors.”

Saugestad said he expects other investment firms to make similar divestments “as part of a logical progression in global fossil fuel divestment.”

Storebrand has also sold off its holdings in Japan’s Mitsui, Kansai Electric Power and Chubu Electric Power for failing to exit the coal business quickly enough.

“Investors need to be responsible and proactive in accelerating the green transition. We are not passive actors awaiting the pending systemic harm that climate change will unleash on ecosystems, societies and economies,” Saugestad said.