Stockholm (NordSIP) – The practice known as greenrinsing continues as Norway’s state-owned oil producer Equinor followed BP and Shell in backtracking on previously set climate targets. Having originally earmarked $10 billion for investments in renewable energy over the next two years, CEO Anders Opedal announced that this target is being halved. At the same time, Equinor has restated its intention to ramp up oil and gas production by 10% over the same period.
Equinor is currently lobbying for the reversal of a court judgement refusing consent for a new oil field development in the UK’s North Sea waters on environmental grounds. The Norwegian firm is eager to exploit the estimated 500 million barrels of oil contained in the Rosebank oil field, arguing that the project will provide the UK with jobs and energy security. Detractors point to the incompatibility of new fossil fuel projects with internationally agreed climate goals, and the fact that any extracted oil will be sold on international markets rather exclusively within the UK.
Decarbonisation only if the price is right
Commenting to the BBC on the decision to backtrack on renewable investments, Opedal said: “We are scaling down our investments in renewables and low carbon solutions because we don’t see the necessary profitability in the future.” The Equinor CEO also expressed his approval of US president Donald Trump’s stance on fossil fuels, adding: “When I hear ‘drill, baby, drill’, I see that as a positive sentiment to the oil and gas business, but I think companies will always decide on drilling programs based on price signals.” Opedal was not clear about how his company intends to remain on its stated 2050 net-zero pathway. Equinor has been rated as one of the more progressive and environmentally aware companies in its peer group, but with these latest actions that position appears to be losing credibility.
Norway has been commended for its domestic environmental credentials, with more than 98% of its electricity generated from renewable sources and an unrivalled fleet of electric vehicles (EVs). However, Equinor’s shift back towards fossil fuels and a newly published report on the investments of the country’s Government Pension Fund Global (GPFG) highlight the fact that Norway of effectively exporting its greenhouse gas (GHG) emissions. Published by NGOs Reclaim Finance and the Nordic Center for Sustainable Finance on 4 February 2025, Breaking Bonds – The Norwegian sovereign wealth fund’s stake in oil and gas debt provides analysis of the Pension Fund Global’s investments in bonds issued by fossil fuel companies that are expanding their production.
Former Petroleum Fund finds oil a hard habit to break
Norway’s $1.8 trillion GPFG is managed by Norges Bank Investment Management (NBIM), which has sought to position itself as a leader among institutional climate investors. NBIM CEO Nicolai Tangen stated: “Our goal is to be the world’s leading investor in terms of how climate risk is managed. Our long-term return will depend on how the companies in our portfolio manage the transition to a zero emissions society.” However, the report reveals that the GPFG currently holds more than $6 billion worth of bonds issued by oil and gas developers. These include the largest non-state-owned producer ExxonMobil, which has production expansion plans that are expected to lead to a 2030 output 36% higher than allowed by the International Energy Agency’s (IEA) net-zero emissions scenario for 2050. The GPFG portfolio also includes bonds issues by TotalEnergies, which is involved in the controversial East African Crude Oil Pipeline (EACOP).
The report’s authors emphasise the fact that these environmentally problematic fixed income holdings are not a legacy of a prior NBIM investment strategy. They point out that during the first half of 2024, which was the warmest year on record, NBIM invested in 20 new bond issues from the fossil fuel sector. Moreover, their analysis focused on issuers from German NGO Urgewald’s Global Oil and Gas Exit List (GOGEL), which narrows the fossil fuel sector down to those companies most responsible for future production expansion plans.
Norway has led the way in decarbonising its domestic energy grid and transportation fleet. It is also one of the few nations currently meeting its expected share of international climate and biodiversity financing. Unfortunately, the actions of its state-owned oil company and the investment strategy of its sovereign wealth fund appear to contradict these efforts by contributing to vast increases in GHG emissions beyond Norway’s borders.
