Two leading European investors push climate accountability further: German asset manager Union Investment cuts ties with ExxonMobil over Scope 3 emissions, while Norway’s Norges Bank Investment Management demands stricter sustainability disclosures amidst diluted EU standards.
Two prominent European financial institutions are redefining expectations for climate performance in the corporate world. German asset manager Union Investment has divested all its holdings in ExxonMobil, while the Norwegian pension fund Norges Bank Investment Management is rolling out stringent new sustainability reporting requirements for its extensive portfolio of over 9,000 companies. These developments come at a crucial time as corporations face increasing scrutiny regarding their climate-related commitments.
Union Investment, which manages assets totalling €500 billion, made headlines after dropping its investments in Exxon and EOG Resources, previously known as Enron Oil & Gas. This decision followed a thorough assessment of its most carbon-intensive investments, as detailed by The Financial Times. Union’s head of sustainability, Henrik Pontzen, highlighted that lengthy discussions with both companies revealed a concerning lack of commitment to long-term climate goals, particularly regarding their Scope 3 emissions—which represent roughly 90% of total emissions. While Exxon has set net-zero targets for its operational Scope 1 and 2 emissions, it has made no similar commitments for its Scope 3 emissions. Union’s disinvestment underscores a growing divergence between European and U.S. asset managers in tackling climate issues, with many U.S. funds reassessing their climate strategies amid changing political winds. According to the Financial Times, Union Investment stands apart from these pressures, remaining solely focused on climate commitments.
Norges Bank Investment Management, associated with the world’s largest sovereign wealth fund at €1.5 trillion, is simultaneously enforcing tougher sustainability standards. Under its 2025 climate action plan, the fund has set elevated expectations for companies within its investment ambit, pivoting towards stricter guidelines that require clear board-level accountability for sustainability efforts, science-based targets for climate goals, and due diligence concerning human rights. This move is particularly notable as the European Union has been seen to dilute its own sustainability reporting standards recently. Sustainable business development advisor Adam Bergsveen mentioned that such rigorous investor expectations could render the weaker EU standards ineffective, encouraging firms to adapt or risk losing access to capital.
Despite these ambitious initiatives, some critics argue that neither Union Investment nor Norges Bank is doing enough, particularly regarding the practical enforcement of these standards. Norges Bank has faced scrutiny over its voting practices on climate resolutions and its relative slow pace in excluding high-emission companies from its portfolio. Nonetheless, under the leadership of Carine Smith Ihenacho, the fund has managed to cover 74% of financed emissions with science-based targets, positioning itself as a leader among institutional investors.
As regulatory environments shift, particularly in the U.S., these two institutions demonstrate a concerted effort to prioritise climate accountability. While Union Investment’s move to divest from Exxon reflects an unwavering commitment to environmental goals, Norges Bank’s robust new reporting standards underscore the pressing call for companies globally to adopt more transparent and responsible practices. The implications of these actions could set significant precedents within the investment community and shape corporate sustainability efforts far beyond Europe.
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Source: Noah Wire Services
- https://www.theenergymix.com/german-investment-giant-dumps-exxon-norwegian-pension-fund-sets-tough-new-reporting-standard/ – Please view link – unable to able to access data
- https://www.ft.com/content/9d837c44-10f8-49f5-94b5-6153fcdee6fa – Union Investment, a prominent German asset manager, has divested all its holdings in ExxonMobil and EOG Resources due to insufficient climate commitments, particularly the companies’ failure to address Scope 3 emissions, which account for about 90% of total emissions. This decision follows extensive dialogues with both companies, highlighting a divergence between European and U.S. asset managers on climate-related initiatives. Union’s move underscores its commitment to prioritising climate risk in its investment strategy, irrespective of political shifts. ([ft.com](https://www.ft.com/content/9d837c44-10f8-49f5-94b5-6153fcdee6fa?utm_source=openai))
- https://www.ft.com/content/c2cb9f70-0972-46ed-a5e2-2d37ae9cc373 – Norway’s $1.8 trillion sovereign wealth fund, managed by Norges Bank Investment Management (NBIM), is reassessing its climate strategy in response to escalating concerns over global warming. NBIM has flagged that traditional financial models may severely underestimate climate-related risks, estimating potential long-term losses of 19% in its U.S. equity holdings due to climate change. Under the stewardship of Carine Smith Ihenacho, NBIM has focused on encouraging its portfolio companies to adopt science-based net-zero emissions targets, with 74% of its financed emissions now covered by such commitments. However, critics argue that the fund is not assertive enough, citing its limited voting on climate resolutions and modest exclusions of high-polluting companies. While citizen groups in Norway advocate for more proactive use of the fund for sustainable investments, accepting higher risks and lower returns, NBIM maintains that its priority is achieving high returns with responsible ownership. Smith Ihenacho stresses the need for political solutions alongside investor action, highlighting the limitations of financial interventions alone in combating the climate crisis. ([ft.com](https://www.ft.com/content/c2cb9f70-0972-46ed-a5e2-2d37ae9cc373?utm_source=openai))
- https://www.reuters.com/markets/europe/companies-should-end-quarterly-earnings-reports-norway-sovereign-wealth-fund-says-2025-01-21/ – Norway’s sovereign wealth fund, managing $1.8 trillion in assets and holding stakes in nearly 9,000 companies worldwide, has proposed that publicly listed companies should shift from quarterly to half-yearly earnings reports. The fund, holding 1.5% of global equities, argues that this change would promote better long-term decision-making and investment, rather than short-term profit prioritisation. Semi-annual reporting, supplemented with continuous updates on material information, is deemed sufficient for transparency. Quarterly earnings pressure may deter companies from public listings, as seen by the decline in listed corporations and Jamie Dimon’s comments on increased reporting demands. The sovereign fund, which has grown significantly since 1996 by saving petroleum revenues, currently invests in equities, fixed income, unlisted real estate, and renewable energy infrastructure. ([reuters.com](https://www.reuters.com/markets/europe/companies-should-end-quarterly-earnings-reports-norway-sovereign-wealth-fund-2025-01-21/?utm_source=openai))
- https://www.ipe.com/news/nbim-calls-for-gri-to-take-more-account-of-biodiversity-positives/10065459.article – Norges Bank Investment Management (NBIM), the manager of Norway’s sovereign wealth fund, has responded to the Global Sustainability Standards Board’s consultation on the revised GRI Biodiversity Standard. NBIM encourages the GRI to consider incorporating positive impacts and biodiversity gains into the standard, rather than focusing solely on negative aspects of corporate behaviour. The letter, signed by NBIM’s chief governance and compliance officer Carine Smith Ihenacho, senior ESG policy adviser Elisa Cencig, and lead investment stewardship manager Snorre Gjerde, also advocates for interoperability with other frameworks, such as the forthcoming recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD). ([ipe.com](https://www.ipe.com/news/nbim-calls-for-gri-to-take-more-account-of-biodiversity-positives/10065459.article?utm_source=openai))
- https://esgnews.com/norges-bank-investment-management-urges-alignment-of-japans-sustainability-disclosure-standards-with-global-issb-guidelines/ – Norges Bank Investment Management (NBIM) has urged the Sustainability Standards Board of Japan (SSBJ) to align Japan’s sustainability disclosure standards more closely with the International Sustainability Standards Board (ISSB) framework. In a letter dated July 31, 2024, NBIM, which manages substantial investments in Japan, stressed the importance of consistent, comparable sustainability information for investment decisions. They recommended minimizing deviations from ISSB standards and making climate-related disclosures mandatory. NBIM’s input aims to enhance global comparability and transparency in sustainability reporting. ([esgnews.com](https://esgnews.com/norges-bank-investment-management-urges-alignment-of-japans-sustainability-disclosure-standards-with-global-issb-guidelines/?utm_source=openai))
- https://carbonaccountingfinancials.com/en/newsitem/norges-bank-investment-management-joins-the-partnership-for-carbon-accounting-financials – Norges Bank Investment Management (NBIM) has joined the Partnership for Carbon Accounting Financials (PCAF), a global collaboration of financial institutions working to harmonize assessments and disclosures of greenhouse gas emissions financed by loans and investments. NBIM’s participation aligns with its 2025 Climate Action Plan, which includes pushing portfolio companies to align their activities with global net-zero emissions in line with the Paris Agreement. Christopher Wright, Head of ESG Risk Monitoring at NBIM, expressed enthusiasm for collaborating with PCAF to further develop standards in this area over the coming years. ([carbonaccountingfinancials.com](https://carbonaccountingfinancials.com/en/newsitem/norges-bank-investment-management-joins-the-partnership-for-carbon-accounting-financials?utm_source=openai))
