The pension funds JØP and DIP in Denmark have decided to exclude eight companies based on insufficient actions taken concerning their negative impact on the climate.

The companies ExxonMobil, Glencore, Chevron, NovaTek, Sasol, Tatneft, AGL Energy and PetroChina have been excluded as a result of a bigger analysis, which the pension funds started in 2018.

The funds announced that climate change is high on the agenda for them for two reasons – climate-related financial risks and opportunities and accountability.

As a result, the supervisory boards in 2018 supported a member proposal to work with the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD).

In February, the funds released the results of a scenario analysis of possible climate-related risks and opportunities for stocks and corporate bonds.

“The scenario analysis showed limited financial risks for the investments broadly, but indicated that some of [JØP’s and DIP’s] portfolio companies may not work satisfactorily with their negative impact on climate,” the funds wrote in a statement.

“Therefore, the pension fund chose to initiate an assessment to understand whether there were companies in the portfolio acting against the pension funds’ policy for responsible investments.”

Furthermore, 70 companies in the portfolio are being assessed to see if they have negative impacts on the climate and if they are among the 100 largest contributors to CO2 emissions.

JØP and DIP believe they have “a responsibility” to work with the Paris Agreement and is, therefore, acting in line with the OECD's guidelines for multinational companies, assessing whether selected portfolio companies are working to prevent and manage their negative impact on climate.

That means that companies must publish information on CO2 emissions, whether they have targets to reduce emissions and information on possible lobbying activities.

In the next few months, the funds will evaluate companies extracting oil sands, energy companies and cement producers.

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