Norway urges Exxon, not StatoilHydro, to cut CO2

By Alister Doyle, Environment Correspondent

OSLO (Reuters) - Norway's $400 billion oil fund has won praise abroad as setting a "gold standard" for sovereign wealth investors -- but can sometimes preach tougher corporate ethics abroad than the government practices at home.

A Reuters survey has shown the fund voted last year for tougher environmental standards at U.S. oil giant Exxon Mobil than the Scandinavian nation imposes on its own oil major, StatoilHydro.

The United States and European Union have said a key worry about sovereign wealth funds is that they may be used to secure strategic national goals, and the vote at Exxon Mobil shows that even the Norwegian fund, which has only small stakes, can take ethical decisions that favor Norwegian firms.

"That certainly can be seen as double standards," said Hans Henrik Ramm, an independent oil analyst and former deputy Norwegian oil minister.

The fund, built on cash amassed by the world's number five oil exporter, says it follows stiff ethical guidelines: refusing, for instance, to own shares in makers of nuclear arms, and stressing awareness of climate change.

But the central bank staff who manage the fund, which is wholly invested abroad in stocks and bonds, voted last year for Exxon Mobil to cut its greenhouse gas emissions when Norway makes no such demands of state-controlled StatoilHydro.

"The fund is a consequence of Norwegian political idealism and correctness. It's a 'do-gooder' thing abroad," Ramm said of the mismatch. "At home policies are more realistic and pragmatic."

He said it was easier to preach climate ethics when owning just 0.3 percent of the stock -- as the fund does in Exxon Mobil -- than when controlling 62.5 percent of StatoilHydro, the Norwegian government's stake.