Norway fund voted for tougher environmental standards abroad than at home
OSLO: Norways $400 billion oil fund has won praise abroad as setting a “gold standard” for sovereign wealth investors. But in one instance, it seemed to be preaching tougher corporate ethics abroad than the government practices at home.
A review of the funds votes at company general meetings has shown the fund voted last year for tougher environmental standards at the U.S. oil giant Exxon Mobil than the Scandinavian government imposes on its own oil company, StatoilHydro.
The United States and the European Union have said a crucial concern about sovereign wealth funds was that they might be used to secure strategic national goals. The vote at Exxon Mobil shows that even the Norwegian fund, which has only small stakes, can make ethical decisions that may favor Norwegian companies.
“That certainly can be seen as double standards,” said Hans Henrik Ramm, an independent oil analyst and former deputy Norwegian oil minister.
The fund, built on cash amassed by Norway, the worlds No. 5 oil exporter, says it follows strict ethical guidelines: it refuses, for instance, to own shares in makers of nuclear arms and it emphasizes awareness of climate change.
But the central bank staff that manages the fund, which is wholly invested abroad in stocks and bonds, voted in May for Exxon Mobil to cut its greenhouse gas emissions. Norway makes no such demands of the state-controlled StatoilHydro.
The proposal was defeated, by 68 percent to 32 percent.
Ramm noted that it was easier to preach climate ethics when owning just 0.3 percent of the stock - as the fund does in Exxon Mobil - than when controlling 62.5 percent of StatoilHydro, the Norwegian governments stake.
The Finance Ministry said it was committed to environmental protection, both at home and abroad, and noted that Norways strict domestic standards included the worlds first carbon dioxide taxes imposed in the early 1990s.
“We cannot guarantee that every step we take for the environment is taken simultaneously in all sectors, everywhere and for all companies,” Roger Schjerva, deputy finance minister told Reuters. “We are sometimes accused of the opposite - of setting tougher demands at home than abroad, of double standards that way. The accusations cut both ways.”
He added that Norwegian environmental rules were among the worlds strictest.
StatoilHydro has not been told to reduce its carbon emissions, but argues that its emissions per barrel of oil produced off Norway are already among the lowest in the world. The company has several times topped indexes for environmental awareness among oil companies.
