Netherlands-based PFZW, one of the largest pension funds in Europe, announced that it has exited its investment in over 300 fossil fuel companies, including Shell, BP and TotalEnergies, over a lack of convincing decarbonization plans, with only seven remaining in its portfolio.
The announcement marks the end of a 2-year engagement process by the pension fund, which included a series of increasing criteria for the oil and gas companies in its portfolio, with an initial wave of 114 companies sold after failing to communicate emissions reduction targets, followed by companies without a stated commitment to the Paris Agreement goal of Net Zero by 2050, and finally those who did not produce sufficient short-, medium- and long-term plans to meet their Paris-aligned goals.
Overall, PFZW exited its investments in 310 companies, selling €2.8 billion of securities.
Joanne Kellermann, Chair of the board of PFZW, said:
“The intensive shareholder dialogue over the past two years with the oil and gas sector on climate has made it clear to us that most fossil fuel companies are not prepared to adapt their business models to ‘Paris’. While the largest companies in this sector do invest in sustainable forms of energy, the switch from fossil to low carbon is not nearly fast enough.”
Fossil fuel companies that remain in the PFZW portfolio include Cosan, Galp Energia, Graanul Invest, Neste, OMV, Raízen, and Worley. In a blog post announcing the divestments, PFZW described the remaining companies as “fully committed to the transition from fossil energy to renewable energy or are currently already producing mainly energy with a low carbon footprint.”
With the end of the oil and gas engagement program, PFZW said that it will now target large fossil fuel consumers, such as power companies and materials producers with a high carbon footprint, and that it will ask these companies for ambitious transition strategies.
PFZW’s goals include working towards a climate-neutral portfolio by 2050, and achieving a 50% absolute carbon reduction by 2030 for its equities, liquid credit and real estate holdings. The pension fund also aims to have 15% of its assets invested in climate solutions by 2030, and to allocate €2 billion over the next 2 years to investments in companies with measurable impact on the climate and the energy transition.