ABP divest €15bn of fossil fuel investments

Dutch pension fund ABP has announced its intention to divest from €15bn worth of fossil fuel investments, with the majority of divestments expected to be complete by the first quarter of 2023.

It said its motivation for this is the recently published reports by the International Energy Agency (IEA) and the UN Climate Panel (IPCC). Furthermore, it said that ABP pension members and employers have shown broad support for the decision.

The €15bn divestment of oil, gas and coal equates to almost 3 per cent of ABP’s total assets, but the fund does not expect the decision to have a negative impact on long-term returns.

Since 2015, ABP has based its climate policy on the insights of the UN Climate Panel (IPCC). The recent IPCC report shows that all over the world people are already experiencing the physical effects of climate change and that without stronger action global warming will reach an unacceptable level. To combat global warming, CO2 emissions must be reduced quickly and drastically.

ABP chairman of the board, Corien Wortmann, said: “We want to contribute to minimising global warming to 1.5C. Large groups of pension participants and employers indicate how important this is to them. The ABP Board sees the need and urgency for a change of course. We part with our investments in fossil fuel producers because we see insufficient opportunity for us as a shareholder to push for the necessary, significant acceleration of the energy transition at these companies.

“From now on we will focus on bulk users of fossil energy such as electricity companies, the car industry and aviation. Using our influence as a shareholder, ABP will encourage companies that use fossil fuels to become more sustainable. We will further tighten the criteria for these investments in 2022. We will also continue to advocate for governments to move towards further CO2 pricing in the industry. And we will continue to push for an end to subsidising fossil fuels.”

Before the summer of this year, ABP announced that it intended to tighten its sustainable and responsible investment policy. Wortmann added: “As soon as we have completed the sale of these fossil investments, we will make this known. Where possible, we intend to increase our investments in renewable energy, already more than €4bn, and our involvement in smart solutions for the energy transition. Naturally, our criteria for return, risk, costs and sustainability also apply here. Our goal is and always will be to realise a good pension for our participants in a livable world.”

In 2022, ABP will set a new CO2 reduction target and it will also draw up a plan for investments in fossil fuel producers that are less easy to trade. The pension fund will also tighten its sustainable and responsible investment policy in other areas, such as conservation of natural resources, digitalisation and human rights. ABP will disclose more information about this in 2022.

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