Norway wealth fund attacks Big Oil over emissions

But Wall Street heavyweights declare their unwavering commitment to Big Oil

Criticism from Norway’s sovereign wealth fund comes as some of the world’s biggest oil companies double down on their core business.

Wed, 27 Sep, 2023 - 19:56

Tim Quinson

A senior executive at Norway’s sovereign wealth fund, which owns a larger share of global stocks than any other investor, says Big Oil’s transition strategy is not holding up as carbon emissions continue to rise.

“The oil and gas industry, as a whole, clearly isn’t doing enough to cut emissions,” said Carine Smith Ihenacho, chief governance and compliance officer at Norges Bank Investment Management.

“Currently, there’s a long way to go, as global emissions are still going up.”

The criticism comes as some of the world’s biggest oil companies double down on their core business and Brent crude inches toward $100 a barrel.

Meanwhile, producers attending a recent petroleum summit lashed out at the International Energy Agency for its unequivocal warning that the industry needs to stop developing new oil fields if the planet is to limit global heating to the critical threshold of 1.5C. Such talk, according to the oil executives present, politicises the climate debate.

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For investors trying to align their portfolios with the goals of the Paris climate agreement, such developments represent a worrying shift in the wrong direction.

“The whole energy system needs to change, with companies taking bigger strides to reduce their use of fossil fuels in favour of renewable energy sources,” said Ms Smith Ihenacho.

At the moment, companies aren’t making the transition at a fast enough pace to achieve net zero by 2050.”

A number of Wall Street heavyweights, meanwhile, are declaring their unwavering commitment to Big Oil.

Speaking this week at the American Energy Security Summit in Oklahoma City, Goldman Sachs chief executive David Solomon defended the need to support fossil fuel companies, dismissing demands from climate activists to restrict their access to finance.

“Traditional energy companies are hugely important to the global economy, they are hugely important to Goldman Sachs,” he said.

“We are all going to continue to finance traditional companies for a long time.”