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Exxon, Chevron Under Climate Change Scrutiny in Norway

Norway’s $870 billion sovereign wealth fund (SWF) is the largest in the world, and it’s now planning to use its prowess to force supergiants Exxon Mobil and Chevron to report more about the effects of climate change on business, both in terms of risk and opportunity.

The Norwegian SWF has said it would endorse proposals meant to compel Chevron and Exxon Mobil to report more on risks climate change policies have on their business.

“We encourage companies to consider the sensitivity of their long-term business strategy and profitability to different future regulatory and physical climate scenarios,” the fund said.

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“One such scenario should consider the successful implementation of policies to limit the likelihood of temperatures rising above 2 degrees Celsius…We want them to be open about their climate strategy and their dialogue with regulators,” it added.

On Tuesday, the fund, which owned 0.78 percent of Exxon and 0.85 percent of Chevron at the end of 2015, said it would vote in favor of shareholder proposals, opposed by both companies' boards, which would require them to report more fully about the risks and opportunities of a changing climate.

The fund has previously supported similar proposals. Last year, the SWF took a similar approach with Royal Dutch Shell Plc and BP Plc, prompted by pressure from shareholders, so the addition of Exxon and Chevron was not unexpected.

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The proposal will be put to a vote at the annual general meetings of Exxon Mobil and Chevron on May 25, 2016. If adopted, the proposals would require the companies to report on the long-term impact on their business of possible public climate change policies--up to 2035 for Chevron and up to 2040 for Exxon Mobil.

The fund's chief executive, Yngve Slyngstad, said many companies were planning to cut their greenhouse gas emissions by 40 percent in coming years to help achieve goals set at the December Paris summit on climate change. Companies "have to explain if they don't intend to reduce their emissions to that extent," he added.

By James Burgess of Oilprice.com

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