Amsterdam, Netherlands – One of the largest pension funds in Europe, PFZW, has made a significant move by divesting from over 300 fossil fuel companies, including big players like Shell, BP, and TotalEnergies. This decision comes after a 2-year engagement process, during which PFZW set increasingly stringent criteria for oil and gas companies in its portfolio. As a result, only seven such companies remain in its investment portfolio.
The divestment from 310 companies marks a major step for PFZW, which sold €2.8 billion of securities as part of this move. According to Joanne Kellermann, the Chair of the board of PFZW, the decision was driven by the lack of convincing decarbonization plans from the majority of fossil fuel companies. Most of these companies were found to be inadequately prepared to adapt their business models to meet the goals of the Paris Agreement.
The remaining fossil fuel companies in PFZW’s portfolio, including Cosan, Galp Energia, and Neste, are described as fully committed to transitioning from fossil energy to renewable energy or are already producing energy with a low carbon footprint. With the conclusion of the engagement program for oil and gas companies, the pension fund will now turn its focus to large fossil fuel consumers, such as power companies and materials producers with a high carbon footprint, seeking ambitious transition strategies from these entities.
Looking ahead, PFZW has set ambitious goals, including 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 fund also aims to allocate €2 billion over the next 2 years to investments in companies with a measurable impact on climate and energy transition.
Overall, this move by PFZW aligns with the growing trend of institutional investors incorporating environmental, social, and governance (ESG) considerations into their investment strategies. It also underscores the increasing scrutiny faced by fossil fuel companies regarding their efforts to address climate change and transition towards renewable energy sources.