Nordea's methane engagement: pushing energy companies to achieve near-zero methane emissions

Our message to oil and gas companies is clear: we expect them to work towards achieving near-zero methane emissions - or, in other words, no gas leaks, since methane is just natural gas - by implementing the rigorous Oil and Gas Methane Partnership 2.0 framework. This means we encourage companies to measure and report methane emissions using direct site-level data rather than estimates, following a globally recognised standard.

Achieving the highest standards of measurement and reporting is essential – not just to track progress, but to build trust and comparability across the sector. Methane transforms from a hidden externality into a visible investment risk and opportunity. High-quality measurement and reporting give us a better foundation to engage with companies on their targets, transition plans and expected emissions reductions – a key lever to accelerate portfolio decarbonisation and drive positive impact.

What does this look like in practice?

We expect companies to use proven methods to reduce emissions, such as comprehensive leak detection and repair programmes and facility upgrades. They must eliminate non-emergency flaring (burning of gas) and venting, and ensure reduction methods are implemented across all their operations. We also expect companies to align their incentives with methane reduction, ensuring targets translate into real operational results.

From an investor perspective, a strong methane performance isn't just an environmental issue: it reveals operational quality, safety and long-term competitiveness. Companies that measure and manage methane effectively typically demonstrate stronger operational discipline, better risk management and ultimately more resilient and profitable business models.

Eric, how important is the policy environment in achieving these goals?

The pace and scale of methane reduction ultimately depend on the policy environment in which companies operate. This brings us to what we're asking of policymakers – and why regulatory clarity and stability matter so much.

Take the EU Methane Regulation as an example. As the regulation moves into implementation, stable and predictable policy is critical from an investor perspective. Investors need to be confident that the regulatory framework for methane measurement, reporting and reduction will remain credible and consistent. And companies need to be sure that the investments they make are the right ones. This stability directly affects capital allocation decisions, risk assessments and long-term planning.

The EU methane rules as they stand aren't just good climate policy: they're needed to reduce risk for companies, portfolios, the securities market and wider society. Delaying or watering down regulation that companies have already based investment decisions on is counterproductive and risks undermining globally agreed methane reduction efforts. It also rewards laggards that have lower operational discipline – those who have left compliance to the absolute last minute and beyond.

What is your message to policymakers who also need to consider energy security?

We recognise that policymakers face competing pressures amid geopolitical uncertainty and energy market volatility. However, this makes regulatory clarity and consistency more critical. This is also because gas burnt or vented could have been used commercially instead. According to the International Energy Agency, the amount of gas lost this way equals more than what has been lost due to the early-May closure of the Strait of Hormuz.

From an investment standpoint, an effective and timely roll-out brings significant benefits. It accelerates methane reduction across the fossil fuel sectors and boosts demand for solutions and services for methane mitigation at scale. It also supports the integrity of corporate disclosures and robust measurement systems, which are essential for effective stewardship and portfolio risk management.

We continue to engage with European policymakers and expect the companies we invest in not only to adapt to regulation but also to support effective climate policy through transparent and constructive advocacy aligned with climate science and net zero goals.