Equinor (EQNR) Barred From Repeating Green Claims in the UK
Equinor ASA EQNR has been prohibited by the U.K.’s advertising regulator from reiterating environmental claims that were made in the period leading up to the approval of its North Sea oilfield project, which EQNR is set to operate, per a report by the Financial Times.
The Advertising Standards Authority (“ASA”) issued a ruling expressing concern over Equinor’s implication that wind farms, oil and gas, and carbon capture contribute equally to its energy portfolio. However, the majority of the company’s revenues is still being derived from oil and gas, contradicting the suggestions made in their advertisements.
Equinor ran similar advertisements in different British media, mentioning wind, oil, gas, carbon capture, and new jobs as part of the bigger energy picture. When responding to the ASA, Equinor explained that the ad was intended for decision-makers like politicians and not the general public.
The ASA’s decision focused on the possibility of these advertisements creating a false impression among the public by overstating the significance of lower-carbon initiatives in Equinor’s overall business operations. The ruling underscored that any future advertisements making environmental claims should avoid misleading by excluding details about the proportion of renewable energy, and carbon capture and storage in Equinor’s existing business.
Environmental activists claimed that the development of new oil and gas fields goes against the U.K.’s efforts to decrease greenhouse gas emissions. Earlier this month, they initiated a legal action to challenge the permitting decision.
However, Equinor rejected the claim that the oilfield project would contribute to an increase in the U.K.’s anticipated emissions. The company is also engaged in clean energy initiatives, such as the Dogger Bank wind farm in the North Sea.
Equinor has previously come under scrutiny in the U.K. In 2019, the ASA cautioned the company for suggesting that gas is a low-carbon energy source, questioning the depiction of methane-rich fuel as a more environmentally friendly option.
Zacks Rank & Stocks to Consider
Equinor currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Imperial Oil Limited’s IMO integrated business portfolio of upstream and downstream assets provides it with a high level of stability, reducing the risk profile.
Imperial Oil remains strongly committed to returning money to investors via dividends. The company's board of directors recently approved a hike in the quarterly dividend payment. The new payout of 50 Canadian cents is 14% above the prior dividend. Further, adhering to the company's long-standing obligation to its shareholders, Imperial Oil revised its existing share purchase policy to buy up to 5% of outstanding common shares.
Murphy USA’s MUSA unique high-volume and low-cost business model helps it retain high profitability, even in the fiercely competitive retail environment.
MUSA remains committed to returning excess cash to its shareholders through continued share buyback programs. As part of this initiative, the fuel retailer recently approved a repurchase authorization of up to $1.5 billion, following the completion of the existing $1-billion mandate. The move underscores MUSA’s sound financial position and commitment to rewarding its shareholders.
Sunoco LP SUN is among the biggest motor fuel distributors in the U.S. wholesale market in terms of volumes. The Zacks Consensus Estimate for SUN’s 2023 and 2024 earnings per share is pegged at $5.19 and $3.83, respectively.
Sunoco has a core competency in terms of its history of disciplined expense management. Over the past few years, the company has demonstrated a remarkable ability to control total operating expenses, with an annual growth rate of only around 2% since 2019.
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