The €162bn healthcare pension fun PFZW has said it will continue investing in fossil fuels for the foreseeable future “as they are still vital for economic development and transport”.
The Dutch scheme, however, acknowledged the need for a transition to sustainable energy sources.
It also noted that it had already begun to engage with companies that either extract fossil fuels or use them for energy generation.
PFZW’s response was triggered by recent scrutiny in the local media of Dutch schemes’ involvement in fossil fuels and their effect on the climate, as well as the so-called ‘carbon bubble’ – the risk of overvaluing reserves that may never leave the ground due to new climate measures.
Currently, PFZW has invested approximately 7.5% of its total assets in coal, oil and gas.
The pension fund said its engagement process focused mainly on coal, and that it aimed to identify the long-term risks for the companies involved, as well as encourage the application of cleaner technologies such carbon capture and storage (CCS).
In addition, it said it was urging politicians and decision-makers to develop “uniform and solid long-term policies” to make investing in climate-change solutions more attractive for institutional investors.
As of the end of 2013, PFZW had invested 3% in “solutions for social issues”, such as climate change and food and water shortages.
It said it wanted to increase this allocation fourfold over the next five years and halve its investments’ carbon footprint.
Last week, the €396bn asset manager APG announced that it expected to remain invested in fossil fuels for “the time being”.
Responding to a petition against investments in coal, tar sands and shale gas, presented by members of the accountability body of civil service scheme ABP – APG’s largest client – as well as several professors and environmental group Milieudefensie, APG spokesman Harmen Geers said divesting from coal within two years would be “too abrupt”.
He said ABP supported a sustainable climate policy but wanted to achieve this goal “gradually”.
Currently, the civil service scheme has a €30bn stake in energy and energy-linked infrastructure.
David van As, director of the €48bn pension fund for the Dutch building sector (BpfBouw), told IPE investments in fossil fuels had not yet been discussed by the scheme’s board.
Meanwhile, PME, the €40bn pension fund for the metal and electro-technical engineering industry, said it would also would remain invested in fossil fuels whilst conducting an engagement process with energy companies for a gradual transition to sustainable energy sources.
PME spokeswoman Gerda Smits added that pension funds should work together with politicians to develop climate-change solutions.
PME has a 4% exposure to fossil fuels.