Equinor's funding cut off by Sarasin & Partners due to climate change apprehensions
Equinor's Shift in Strategy Sparks Investor Concerns
In a surprising move, Norwegian energy giant Equinor announced last month that it would be cutting its investment in renewable energy generation from $10 billion to $5 billion and increasing oil and gas production. This decision has sparked concerns among investors, particularly Sarasin & Partners, who have scaled back their holding in Equinor.
Sarasin, along with other investors, co-filed a shareholder resolution with Equinor in the previous year, asking the company to uphold its commitment to the Paris Agreement. However, Equinor's strategy shows a cautious but persistent progression toward decarbonization, balancing shareholder returns and portfolio optimization with energy transition goals.
Equinor maintains a strategic commitment to renewable energy investments and aligning with the energy transition. The company continues to invest significantly in offshore wind projects and low-carbon solutions, reflecting efforts to support long-term lower-carbon energy goals. However, Equinor also reported nearly $1 billion impairment charges linked to offshore wind project uncertainties and has reaffirmed substantial capital spending, with a dominant focus on oil and gas production alongside renewables growth.
Natasha Landell-Mills, head of stewardship at Sarasin & Partners, expressed concern over Equinor's refusal to reduce emissions. She stated that Equinor's strategy puts long-term shareholder capital at risk. The shareholder resolution was rejected by Equinor's shareholders, leading Sarasin to scale back its holding to £3 million shares in December 2023 and hold the remainder in January 2024.
Sarasin, which manages £18.5 billion for various clients, started investing in Equinor in 2021. The company was once viewed as a leader in the green transition, but Sarasin's divestment indicates a shift in perception. Landell-Mills welcomed open and professional interactions with Equinor's board but criticized the Norwegian government's backing of Equinor's U-turn.
The Norwegian state holds a majority stake of 67% in Equinor. Norway is currently governed by the Labour party following a coalition collapse in January. A General Election is due in September 2025 in Norway, which could potentially impact Equinor's future direction.
Equinor's next AGM is scheduled to be held on 14 May. It remains to be seen how Equinor will address the concerns raised by investors like Sarasin & Partners and whether the company will make any significant changes to its strategy to align more closely with the Paris Agreement.
[1] Equinor's Q2 2025 reports [2] Offshore wind projects and low-carbon solutions [3] Share buybacks and portfolio optimization [4] Capital spending for 2025 [5] Energy security and fossil fuel sales agreements
- Despite Equinor's shift towards increased oil and gas production, the company continues to invest in environmental science, such as offshore wind projects and low-carbon solutions.
- In the aftermath of Equinor's strategic decisions, general news outlets and environmental-science focused publications have reported concerns about the impact on climate-change mitigation efforts.
- With the scaling back of its holding in Equinor, Sarasin & Partners is reviewing its investment opportunities in the renewable energy sector, focusing on businesses and finance ventures that align more closely with their commitment to the environment and the Paris Agreement.
- As Equinor prepares for its AGM, political discussions surrounding energy security and fossil fuel sales agreements are gaining prominence, particularly in light of Norway's upcoming election in September 2025.
