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Equinor shareholders back management's climate plan, reject rival motions

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Equinor representatives at the company's annual general meeting in Stavanger, Norway, on May 11.
Source: Arne Reidar Mortensen/Equinor

Equinor ASA shareholders voted in support of the Norwegian oil major's first energy transition plan while rejecting a series of rival motions from activist investors to strengthen the company's climate targets and speed up investments in renewables.

The energy transition plan was supported by 97.53% of shareholders in an advisory vote at the company's annual general meeting in Stavanger, Norway, on May 11. Equinor, which is majority-owned by the Norwegian government, designed the plan to outline a pathway to net-zero emissions by 2050.

Shareholders also voted to reject a rival proposal from Dutch activist investor Follow This that called on Equinor to set emissions-reduction goals in line with the Paris Agreement on climate change. Just 3.57% voted in favor of the motion.

Follow This said the result still equated to a "shareholder rebellion" when taking into account governmental shareholders that consistently vote with management. The Norwegian government is a 67% investor in Equinor, and investment manager Folketrygdfondet manages the government's pension fund. Excluding those two shareholders, 38% of other investors voted for the rival motion, Follow This said.

"Almost 40% of the free shareholders urged Equinor to advance its emissions reduction targets to Paris-alignment, especially the target for 2030," Mark van Baal, founder of Follow This, said in an emailed statement. "A promise for net-zero by 2050 is empty without a serious plan to reduce emissions in the 2020s."

By the same measure, Follow This said the percentage of nongovernment shareholders backing Equinor's in-house energy transition plan was 63%. The activist said the plan "increases emissions and is therefore not Paris-consistent."

An Equinor spokesperson declined to comment on rival shareholder proposals but described the company's in-house energy transition plan as "an invitation to dialogue with shareholders and society."

"We appreciate the engagement and are very pleased that the board's proposal is strongly supported by our shareholders," the spokesperson said.

Shooting for net-zero

Equinor aims to reduce groupwide Scope 1 and Scope 2 emissions, from its own operations or purchased energy, by 50% by 2030 compared with 2015 levels — including 90% via absolute reductions — on its way to net-zero by midcentury.

It plans to lower its net carbon intensity, including Scope 3 emissions, by 20% by 2030, 40% by 2035 and 100% by 2050. Scope 3 emissions — those associated with a company's products — make up the largest share of the oil and gas industry's carbon footprint.

The Follow This proposal, along with a separate motion filed by green groups WWF and Greenpeace, called for Equinor to set absolute Scope 3 emissions-reduction goals, rather than just targets covering emissions intensity.

Greenpeace, which also filed a separate proposal calling on Equinor to establish a state restructuring fund for oil workers, called the voting results "deeply disappointing."

"If the Norwegian government was serious about acting on climate change, they would be utilizing their power as the majority shareholder of Equinor to support shareholder proposals on emission cuts and a just transition," Frode Pleym, head of Greenpeace Norway, said in an emailed statement.

A resolution at Equinor from Follow This received 5.6% of votes in the 2021 AGM season. The group said at the time that this equated to 39% of nongovernment votes, though it did not exclude Folketrygdfondet in that calculation.

Oil majors in Europe and North America are facing a record number of climate-related shareholder motions from activist investors during the 2022 voting season.

A motion filed by Follow This at U.S.-based ConocoPhillips, calling on the company to set stricter emissions-reduction targets, received 39% support at a meeting May 10. The Dutch group has similar motions on the ballot at BP PLC, Shell PLC, Exxon Mobil Corp. and Chevron Corp. this month.

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