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Danish pension fund AkademikerPension has become the latest in a series of investors divesting their stakes in oil and gas companies.
AkademikerPension has completed its divestment of stakes in upstream oil and gas firms with its most recent divestment in Italy’s Eni SpA, according to a recent statement. The fund’s stake in Eni was $4.64 million (DKK 33 million) before the decision to divest.
AkademikerPension Chief Investment Officer Anders Schelde said, “After several years, where we together with other investors, have tried to get these companies to change their climate course, we have to realize that the top management in the oil and gas sector simply refuse to do so in [a] manner consistent with the goals of the Paris agreement. Therefore, we have now sold off and excluded ENI, the last remaining upstream fossil fuel company in our portfolio”.
The pension fund said it had excluded “the vast majority” of oil and gas majors in the past several years, but it allowed Eni “to remain as an eligible investment” while the fund tried to “influence management via active ownership”.
“However, after a meeting with ENI this spring, it was clear that fossil fuel expansion and exploration remain a central part of the business strategy. For AkademikerPension, this is the main reason for the exclusion, as there is no room for new fossil fuel projects in Paris-compatible scenarios, according to the International Energy Agency, and we believe that doing so exposes ENI to unacceptable long-term risks”, Schelde explained in the statement.
“Through a subsidiary, ENI will expand exploration for oil in vulnerable Arctic areas, which just confirms to us that ENI is a company that belongs on our exclusion list and not in our portfolio”, Schelde said.
“The climate crisis is here and it is now, and we have to act. When we and other investors sell our holdings it puts upward pressure on the capital costs of the fossil fuel companies. All things being equal, it will therefore be more expensive for them to raise capital to fund their capex, and thus hopefully it will also mean less new fossil-related capex going forward. Furthermore, and maybe even more important, it sends a strong market signal to the board and top management to change course”, Schelde continued.
AkademikerPension’s divested shares and bonds in oil, gas, and thermal coal amount to $520 million (DKK 3.7 billion) since 2018. The fund’s assets under management currently total $19.12 billion (DKK 136 billion), according to the statement.
“These companies should take the lead and show the way for the green transition, they have the capital and resources to do so. Instead, they do the opposite and continue down a pitch-black path that we do not want to follow in any way”, Schelde concluded.
The AkademikerPension announcement follows a similar move by the Church of England to quit oil and gas companies in June. Over half of the Church of England’s 42 dioceses, which have their own investment bodies, have now vowed to exclude fossil fuels from their investment portfolio, according to Christian group Operation Noah.
In July, international development agency Christian Aid said it was changing its banking provider from Barclays to Lloyds due to the former’s “record on fossil fuel finance”.
“Whilst Barclays was able to provide banking services to fragile contexts, their record on fossil fuel finance, and their weak commitment to future improvements in this area, meant that we had to seek a more suitable provider”, Christian Aid COO Martin Birch said in an earlier statement.
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