The mayor of Amsterdam has written to Dutch pensions giant ABP calling on it to stop investing in companies with links to fossil-fuel activities.

In a letter to the board of the €363bn pension fund, which covers municipal employees in the Netherlands, the city’s mayor Eberhard van der Laan wrote: “If ABP does not end investments in the fossil fuel industry within a reasonable timeframe, pensions of participants will be at serious risk.”

Van der Laan said his call was a response to the campaign by the group Amsterdam Fossielvrij (Fossil Free Amsterdam) and the city’s decision to rid itself of investments incompatible with its aim of speeding up the transition to a “circular economy” to prevent irreversible climate impacts.

A circular economy describes an industrial economy that produces no waste and pollution.

Van der Laan acknowledged that the pension fund had already terminated some of its fossil fuel-related investments in 2015 in response to requests by ABP members.

But he wrote: “Despite these positive steps, you still invest in fossil-fuel businesses.

“We therefore ask you to sharpen your ambition and to evaluate the investment portfolio, considering the interests and links companies have with the fossil fuel industry, and where these links are confirmed as existing, not to invest and to put an end to existing investments in the fossil fuel industry, starting with coal, nuclear power and shale gas.”

If direct divestment were not possible, the mayor asked the pension fund to establish itself as an activist shareholder and encourage companies to make sustainable investments, keeping an eye on the European ambitions to reduce CO2 emissions by 80-90% from 1990 levels by the year 2050.

In response to the letter, a spokesman for ABP told IPE it was also concerned about climate change.

“The fund therefore has set ambitious goals in its investment policy to contribute to a better environment and a sustainable world,” he said.

For example, ABP plans to reduce CO2 emissions in its portfolio in 2020 by 25% and expand its investments in renewable energy significantly, he said.  

“ABP expects a decline of fossil fuels and an increase in renewable energy in its investments in the coming decades,” he added.

He said this would happen in a gradual way because, as independent surveys showed, fossil fuel would be needed in the next few decades.

He said ABP believes acute divestment from fossil companies right now would not help the climate.

“The fund prefers to use – during the long transition period – its role as a shareholder to influence fossil fuel businesses,” the spokesman said.

Sven Jense of Amsterdam Fossielvrij said: “Cutting our financial ties to the fossil fuel industry will make our city and our pensions fit for the future.”

However, he said “an ambitious timeframe” also needed to be set to drop these investments and to effect a transition of the city’s harbour activities away from fossil fuels. 

“We don’t want our city to make money out of climate destruction,” he said.

Last October, ABP outlined its new socially responsible investment policy.

Apart from its aim of shrinking the portfolio’s carbon footprint, the pension fund said it was to double investments in such things as renewable energy, clean technology and commodity recycling to more than €58bn over the next five years.

It also said it aimed to increase its investments in renewable energy by five times to more than €5bn.