Storebrand Asset Management, a large Norweigan financial services, and investment company, has let go of some of the big companies’ stocks. The reason for the decision comes with the hedge fund’s new climate change policies.
Change of Climate
The asset management firm, with over $90 billion under its umbrella, divested over two dozen companies. The move included even energy giants like ExxonMobil and Chevron last month. This decision comes as the private money manager from Norway introduces a new green policy. The policy comes against those companies attempting to obstruct directives involving the climate.
A $91 billion asset manager is beefing up its climate policy — and dumping Exxon and Chevron as a result https://t.co/q8xYwSUTdy
— Bloomberg (@business) August 24, 2020
Storebrand Asset Management divested over $47 million in 21 companies, according to the Wall Street Journal. About half of this figure comes from Chevron and Exxon. The hedge fund also dismissed six more businesses from future investments. Along with the two mentioned oil giants to exit Storebrand are chemical company BASF SE and mining business Rio Tinto Group. ConocoPhillips and Husky Energy also left the index.
Go for Green Measures
Per WSJ, Storebrand’s new policy involves cutting ties with companies with over 5% revenue from coal or oil sands. Moreover, the private asset manager will also let go of those who lobby against the Paris Agreement. The agreement is an understanding among nations involving reducing greenhouse gas emissions.
Furthermore, in an interview with chief executive Jan Erik Saugestad, the criteria for lobbyists include how much they invest in preventing climate change. He also said that: “The Exxons and Chevrons of this world are holding us back.”
Meanwhile, the Journal quoted Saugestad saying: “Companies that don’t recognize climate risk or do not seize those opportunities are, in our mind, less attractive.”
Pressure on Oil Companies
Storebrand CEO further said that other energy companies like BP, Equinor, and Shell are not exempted from the hedge fund’s new climate policy.
The Guardian reported that analyst firm InfluenceMap discovered that giant oil companies are pouring hundreds of millions of dollars yearly in lobbying efforts to prevent or postpone new climate change policies.
Bloomberg said in an article that both Exxon and Chevron claimed they are in support of the Paris Agreements. The two oil companies also asserted they are also investing in tech that would cut down emissions.
“In a global context, we’re quite a small player. But we’re also in the leading global position on sustainable investments,” Storebrand’s Saugestad stated.