PME, the Dutch pension fund for the metals sector and the technological industry, has ditched all its investments in the fossil fuels industry. It has sold €1.2bn in stocks and bonds of companies involved in the production or transportation of fossil fuels, including its investments in Shell, BP and Total.
The announcement comes just a day after Horeca & Catering, the €15bn fund for the hospitality industry, said it was taking similar steps.
The €62bn fund which administers the pensions of chip machine producer ASML, among others, had already sold off its stakes in the most polluting oil and gas companies in recent years. This had already reduced the share of oil and gas in its equity portfolio to 1.8%.
PME is taking the radical step to divest from fossil fuels because engagement with the sector produced insufficient results, said the fund’s chair, Eric Uijen.
Executive board member Marcel Andringa added: “After unsuccessful dialogues we already divested from a number of individual companies. Now we have sold all of our interests in fossil oil and gas companies.”
PME will nevertheless continue its engagement programme on climate change, although it will get a different focus. Instead of fossil fuel companies, PME will now target large consumers of fossil energy, such as utility companies.
“These firms are capable of making a shift in their energy mix and make the move towards a clean energy system,” said Uijen.
‘No impact on future returns’
Uijen believes the divestment will not impact future returns. “The risk/return profile of our investments will remain unchanged,” he said. “Even if the oil and gas sector were to produce very good returns in the future, we expect this effect to be compensated sufficiently by our other investments.”
Moreover, according to Andringa, the decision to divest from fossil fuels mitigates risk on the longer term. “Climate change is a real risk within our investment portfolio; with this step we are able to manage that risk even better,” he said.
PME will use the proceeds of the sale of its fossil fuels allocation to more than double its investments in renewable energy in the coming years. The fund currently invests more than €0.5bn in the energy transition and is currently on the look-out for suitable additional investments in the field, a spokesperson for PME told IPE.
“We will be intensifying our investments in renewable energy companies and renewable energy projects. Going forward, we will shift our capital from the old energy system, meaning fossil fuels, to solar and wind energy and to [upgrading] the energy system,” responsible investment strategist Daan Spaargaren said in an English-language video interview on the pension fund’s website.
Daan Spaargaren, responsible investment strategist at PME