Norges Bank Investment Management (NBIM), the investment manager for Norway’s $1.7 trillion oil fund revealed that it has asked Shell to provide more detail into its mid-term climate strategy, although the fund also announced that it will vote against a shareholder resolution calling for the oil giant to set a goal to reduce emissions from the use of its products.

The statement, released by NBIM with its voting plans disclosure for the upcoming Shell AGM this week, follows a series of changes announced by Shell earlier this year to its energy transition strategy under new CEO Wael Sawan. While the new strategy included the company’s first interim target to reduce emissions from the use of its oil products, it also eliminated a 2035 emissions intensity goal, and revised down its interim 2030 intensity reduction goal to 15% – 20%, from its prior 20% target.

NBIM was established to manage revenues from Norway’s oil and gas resources. The fund has grown to one of the world’s largest, owning nearly 1.5% of all shares in the world’s listed companies, with holdings in nearly 9,000 companies in 70 countries.

In 2022, NBIM released its climate action plan, which included a target to reach net zero emissions for all companies in the fund by 2050, and a pledge to set climate-related expectations for companies in its portfolio, including a requirement to set net zero goals. The fund published its climate-related expectations for portfolio companies last year, which included requirements to disclose value chain emissions, report on climate risks, and implement transition plans.

In its voting plan disclosure prior to the Shell AGM, NBIM reiterated its expectation for interim and net zero targets, and added that its has “encouraged Shell to make additional strategy disclosures that could reduce uncertainty about the company’s direction in the mid-2030s.”

Shell has faced pressure from environmental and shareholder groups to set interim value chain emissions reduction targets, including the filing of a shareholder resolution this year by a group of 27 institutional investors representing more than $4 trillion in assets under management, led by oil and gas-focused shareholder activist group Follow This, urging the company to set a Paris Agreement-aligned medium-term target to reduce emissions arising from the use of its products.

The resolution calls on Shell to align its medium-term target for reductions in Scope 3 emissions from the use of its energy products with the goal of the Paris Agreement, which aims to limit global warming to well below 2°C, and to pursue efforts to limit the temperature increase to 1.5°C. The resolution also states that it leaves the strategy for achieving the targets up to the board of the company.

Follow This led a group of shareholders last year in filing a similar resolution, which received 20% support at Shell’s 2023 AGM. The updated resolution incorporates key changes, including replacing last year’s “2030 target” with a less prescriptive “medium-term targets,” and a rewritten supporting statement focused solely on emissions.

While acknowledging that “Shell’s Energy Transition Strategy has evolved under the new CEO,” however, NBIM indicated that it will vote against a shareholder resolution, based on its belief that the updated strategy “sufficiently retains the core components of a Paris-aligned transition plan.”

Following the release of NBIM’s voting plans, Follow This criticized the wealth fund’s decision. In a statement released by the group, Follow This founder Mark van Baal said that the decision puts NBIM’s “climate credibility into question.

Van Baal added:

“NBIM’s ‘belief’ that an oil and gas company that will not reduce its total emissions this decade is Paris-aligned is remarkable.

“Luckily, more and more investors base their decisions on science and take leadership by co-filing and voting in favour of climate resolutions. NBIM will follow their leadership one day.”