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By Dieter Holger
Norwegian oil-and-gas giant Equinor ASA (EQNR.OS) has adopted new climate-change policies following pressure from investors.
Next year, the company will publish targets to reduce its greenhouse-gas emissions beyond 2030 and will report annually on its progress. It will also assess how its portfolio will perform in a future where global warming is below 2 degrees Celsius, in line with the Paris Agreement; strengthen the link between executive pay and its targets; and consider ending its membership of industry associations working to stall government action on climate change, Equinor said.
"The actions we announce today make us even more competitive in the energy transition, and support the goals of the Paris Agreement," said Eldar Saetre, president and chief executive officer at Equinor.
The decision follows pressure from investors led by the asset management arms of UBS Group AG (UBS), HSBC Holdings PLC (HSBA.LN) and StoreBrand ASA (STB.OS). The asset managers are members of Climate Action 100+, a group of more than 300 investors representing more than $33 trillion in assets who have engaged with oil companies.
"Climate change is a significant challenge and the company's commitments on scenario analysis, strategy and reporting will help provide transparency to shareholders," said Thomas O'Malley, global head of corporate governance at HSBC Global Asset Management.
Equinor is the latest European oil-and-gas major to bow to investors as concerns mount over how energy companies address the warming climate. Last year, Royal Dutch Shell PLC (RDSA.LN) agreed to set more targets to reduce its emissions, while this year, BP PLC (BP.LN) agreed to a shareholder resolution requiring it to describe how the company's strategy is consistent with the Paris Agreement.
American oil majors have been more resistant to adopting ambitious climate-change business practices, although their investments in clean energy have picked up in recent years.
Global oil-and-gas production needs to fall around 20% by 2030 and around 55% by 2050 to meet the Paris Agreement, according to a United Nations climate-science panel. However, oil-and-gas companies are expected to spend $4.9 trillion over the next decade on the exploration and extraction of new oil fields, which comes into conflict with the agreement, according to a report out this week from Global Witness, a nonprofit focused on human rights.
"There is an alarming gap between the plans of oil and gas majors and what the latest science shows is needed to avoid the most catastrophic and unpredictable climate breakdown," said Murray Worthy, senior campaigner at Global Witness and the author of the report.
Write to Dieter Holger at email@example.com; @dieterholger
(END) Dow Jones Newswires
April 24, 2019 06:16 ET (10:16 GMT)
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