By Witness Radio team.
In a significant move towards aligning its investments with environmental goals, Pensioenfonds Zorg en Welzijn (PFZW) has announced its decision to disinvest from fossil fuel giants such as Shell and Total.
This decision comes after two years of intensive engagement with fossil fuel companies, during which PFZW sought to encourage the development of climate transition plans in line with the Paris Climate Agreement.
PFZW is the pension fund for the care and welfare sector based in the Netherlands. PFZW invests the contributions paid by employers and employees to achieve a high, stable, and responsible return over the long term at an acceptable level of risk. The fund invests globally in the investment categories of variable-yield securities and fixed-income securities. The pension fund had a total of € 217 billion of assets under management at the end of 2022.
According to PFZW, 310 oil and gas companies failed to demonstrate a clear transition to a cleaner energy mix.
Some of the big oil and gas companies that PFZW parted ways with are Total, Shell, and BP among others. These major corporations have frequently faced criticism for investing in fossil fuel projects.
For example, Total, among other projects putting the World climate at risk, is advocating for the construction of the East African Crude Oil Pipeline (EACOP) and Tilenga projects in western Uganda. Despite, environmental experts warning of potential environmental damage, Total has persisted in heavily funding these projects.
PFZW’s disinvestment strategy is part of its broader commitment to sustainability and responsible investing. The PFZW fund has sold its stakes in 310 oil and gas companies, totaling 2.8 billion euros, for failure to demonstrate a clear transition to cleaner energy sources.
During this period, dialogue with oil and gas companies was significantly intensified to encourage them to produce verifiable transition plans that support the goal of the Paris Climate Agreement.
Joanne Kellermann, chair of the board of PFZW said that “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. Incidentally, this reflects the slow pace we see globally in the transition to renewable energy.”
According to PFZW, seven listed oil and gas companies with a compelling climate transition strategy will remain part of the portfolio. This contributes to the goal of investing more in companies that play a positive role in the global energy transition.
Despite parting ways with numerous fossil fuel companies, PFZW will continue to invest in seven oil and gas companies that have demonstrated a commitment to transitioning towards renewable energy sources. These companies, including Cosan S.A., Galp Energia, and Neste Oyj, are regarded as frontrunners in the energy sector due to their efforts to reduce carbon emissions and invest in low-carbon technologies.
“The seven companies we will continue to invest in are the only ones that show a switch is possible. At the same time, it is disappointing that there are only seven. We encourage the biggest players in the oil and gas sector to also accelerate the switch to a cleaner energy mix.” She revealed.
Furthermore, to significantly increase its investments in companies focused on improving the climate and energy transition, allocating two billion euros over the next two years to companies with measurable impacts on climate and the energy transition reflecting PFZW’s dedication to achieving a climate-neutral investment portfolio by 2050, with interim goals such as a 50% absolute carbon reduction by 2030 for equities, liquid credit, and real estate.
