'Equinor faces withdrawal by Sarasin & Partners due to climate change reservations'
Sarasin & Partners, a UK-based asset manager with £18.5bn in assets under management, has been a vocal advocate for renewable energy and climate-aligned investments. The firm started investing in Equinor, an energy company with a mixed profile in renewable energy, in 2021. However, their relationship has been marked by ongoing investor pressure for Equinor to transition towards renewable energy investments and reduce fossil fuel dependency.
In December 2022, Sarasin & Partners scaled back its holding in Equinor, reducing its shares from £18.5m to £3m. This move came after the firm co-filed a shareholder resolution with three other entities, asking Equinor to uphold its commitment to the Paris Agreement.
Despite this, Equinor announced in the same month that it would halve its investment in renewable energy generation from $10bn to $5bn, and instead ramp up its oil and gas production. This decision has raised concerns among investors, including Sarasin & Partners.
Natasha Landell-Mills, head of stewardship at Sarasin & Partners, expressed her concerns about Equinor's refusal to reduce emissions. She stated that Equinor's strategy poses a risk to long-term shareholder capital. Landell-Mills praised the open and professional interactions with Equinor's board but criticized the Norwegian government's backing of Equinor's U-turn.
Equinor's next AGM is due to be held on 14 May. The Norwegian state, which holds a majority stake of 67% in Equinor, rejected a shareholder resolution submitted by Sarasin & Partners, demanding more robust climate plans and alignment with the Paris Agreement goals.
Norway is currently governed by the Labour party after a coalition collapse in January. A General Election in Norway is scheduled for September 2025. The outcome of this election could potentially influence Equinor's climate strategy in the future.
Sarasin & Partners remains committed to its climate-focused investment approach, actively integrating climate change analysis into its investment decisions. The firm's climate analyst leads work on stress-testing portfolios against climate scenarios, indicating a commitment to incorporating climate risks and opportunities into investment decisions. Sarasin also leads shareholder resolutions aimed at companies like Equinor, pushing for stronger climate action and alignment with net-zero pathways.
As of March 2024, Sarasin & Partners held 9.5m shares in Equinor, reflecting its ongoing engagement with the company on climate-related issues. The dynamic between Sarasin & Partners and Equinor highlights the growing importance of climate-aligned investments and the pressure on companies to transition towards renewable energy sources and reduce fossil fuel dependency.
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