Lothian Pension Fund (LPF) has retained its holding in Thai oil and gas company PTT after reviewing the investment under a new climate policy that introduced a presumption against holding equity in fossil fuel companies that fail to demonstrate credible transition plans.
In the latest issue of its responsible investment publication Engage, the fund said investment decisions should “consider all available information rather than being driven by a single point-in-time factor”, adding that the presumption against laggard oil and gas companies is intended to provide “additional scrutiny” of holdings in the sector.
The Edinburgh-based fund, which manages pensions for more than 93,000 members across 56 employers, is Scotland’s second-largest Local Government Pension Scheme (LGPS) provider.
Under its 2025 Climate Change Policy, Lothian committed to promoting a managed decline of the fossil fuel sector and introduced a presumption against investing in “laggard oil and gas companies” – firms that have been subject to years of engagement through Climate Action 100+ and have a Transition Pathway Initiative (TPI) Management Quality score below four out of five.
The review comes amid an ongoing debate among investors over how to support decarbonisation while maintaining energy security in developing economies.
According to the pension fund, PTT, which was acquired before the policy was adopted, was identified as meeting its definition of a laggard oil and gas company and was therefore subject to review.
Rather than divest, the fund opted to retain the holding and joined PTT’s Climate Action 100+ engagement group in May 2025.
Lothian said its review found that PTT had narrowly missed achieving a higher TPI Management Quality score, having failed to satisfy a single indicator relating to climate policy advocacy and membership of supportive business associations.
The fund added that the Thai state-owned energy company’s transition strategy was ambitious relative to national targets, citing commitments to achieve carbon neutrality by 2040 and net-zero emissions by 2050.
“PTT no longer meets our definition of ‘laggard oil and gas companies’. In Dec 2025 TPI updated PTT’s MQ assessment to 5, recognising that PTT has a strategic understanding of risks and opportunities related to the low-carbon transition and integrates this into its business strategy,” the pension scheme stated.
Lothian Pension Fund also highlighted PTT’s investments in renewable energy, including a stake in Scotland’s Seagreen offshore wind farm, as well as electric vehicle partnerships and charging infrastructure in Thailand.
As a major energy supplier across Southeast Asia, PTT has both “the ambition and the potential to deliver on the energy transition in Thailand and the broader region”, the fund said.
