"Equinor's financing under scrutiny: Sarasin & Partners ends investments due to environmental apprehensions"
In the world of sustainable and responsible investing, the decisions made by leading asset management firms carry significant weight. One such firm, Sarasin & Partners, has recently expressed concerns about a major energy company, Equinor, and its strategic direction.
Sarasin, which manages £18.5bn on behalf of various clients, started investing in Equinor in 2021, holding 9.5m shares in March 2024. However, in December of the same year, the firm scaled back its holding to £3m shares. The reason for this reduction, according to Natasha Landell-Mills, head of stewardship at Sarasin & Partners, is Equinor's strategic shift that could potentially harm sustainable economic growth and put long-term shareholder capital at risk.
Landell-Mills has praised Equinor's board for open and professional interactions but has criticised the Norwegian government's backing of Equinor's U-turn. She believes that the Equinor board, with apparent government backing, is prioritising short-term returns over long-term sustainable capital creation.
Equinor, a company once considered a leader in the green transition by Sarasin, announced last month that it would halve its investment in renewable energy generation from $10bn to $5bn and increase its oil and gas production. This move has raised concerns about Equinor's commitment to reducing emissions and aligning with the goals of the Paris Agreement.
In the previous year, Sarasin co-filed a shareholder resolution with other institutions, asking Equinor to uphold its commitment to the Paris Agreement. Regrettably, this resolution was rejected by Equinor's shareholders.
As of the latest available information, Sarasin & Partners has not publicly announced any divestment from Equinor specifically due to disagreements over fossil fuel investments or differing commitments to the Paris Agreement. If any significant change were to occur, it would likely be communicated through their official channels or sustainability reports.
It is important to note that Equinor is a significant player in the energy sector, with the Norwegian state holding a majority stake of 67%. The upcoming General Election in September 2025 in Norway may influence Equinor's future direction and its commitment to sustainable investments.
Equinor's next Annual General Meeting (AGM) is scheduled to be held on 14 May, where shareholders will have the opportunity to voice their concerns and expectations for the company's future. Sarasin & Partners, as a top 20 investor in Equinor, will undoubtedly be among those attending, continuing their efforts to promote sustainable capital creation and responsible investing in the energy sector.
Sarasin & Partners, a leading asset management firm, has reduced its holding in Equinor, a significant player in the energy sector, due to concerns about Equinor's strategic shift that may harm sustainable economic growth and put long-term shareholder capital at risk. The firm, which manages £18.5bn on behalf of clients, believes that Equinor's prioritization of short-term returns over long-term sustainable capital creation is a cause for concern, particularly as Equinor announced a halving of its investment in renewable energy generation and an increase in oil and gas production, raising questions about Equinor's commitment to reducing emissions and aligning with the goals of the Paris Agreement.
