'Close down wind business': Equinor board pincered as Empire raises stakes
Oil giant insists offshore wind has role in its energy transition ambitions but New York setback has turned up the temperature
Equinor's board of directors weathered a blast of pointedly polarised criticism on Wednesday when the Norwegian oil company's annual general meeting of shareholders served as a platform for the widely diverging demands of activist shareholders.
Equinor bosses saw off several shareholder resolutions demanding that the company redouble its efforts to tackle climate change, but also faced a growing number of demands pointing in the opposite direction, including calls for the company to close down its wind power business and, in one case, to "decommission all wind power plants as soon as possible".
Another resolution demanded that board and executive committee members should be denied bonus schemes and salary increases in 2025 in the light of "financial misjudgements regarding wind power".
In its written responses to each resolution, the Equinor board acknowledged that the profitability of new offshore wind projects is under pressure, "partly due to high inflation, interest costs and supply chain bottlenecks in a growing industry" but insisted that its offshore wind projects are consistent with an expected return on equity of 10% for its renewable and low-carbon solutions portfolio.
Counter cyclical
"Equinor has an expressed ambition to act counter-cyclically with a focus on creating shareholder value, and through 2024 the company also took several steps to ensure value-adding growth in the renewables sector in general and offshore wind in particular," it stated
The Equinor board also defended the importance of offshore wind in the future lower carbon energy mix, "partly because .... offshore wind will also be one of the few options for large-scale renewable energy for some densely populated areas".
"Equinor ... believes that there will be a market for power generation from offshore wind in the future, and that the company has significant competitive advantages within offshore wind due to experience from large industrial projects offshore," the board stated in its written responses.
The board of directors ultimately had little trouble seeing off resolutions demanding either more or less investment in clean energy, and won approval for the company's existing energy transition strategy, which includes renewable energy projects that pass its threshold barrier for returns.
The board also won endorsement for remuneration of senior executives, including CEO Anders Opedal.
Another faction of activist shareholders also demanded a more stringent performance on human rights and other forms of compliance, including one representative of Greenpeace who wondered how and Opedal chairman Jon Erik Reinhardsen "can sleep at night".
In his own response to shareholder concerns about Empire Wind, Opedal reaffirmed the company's determination to push back against the US stop order.