Danish pension company AP Pension has added a further 73 companies to its exclusion list of firms in which it will not invest its members’ pension savings, bringing the total to 187 companies.

The exclusions were made as part of AP Pension’s climate strategy, with the pension company tightening its criteria for fossil fuel investments, including within coal, utilities, tar sands, and oil and gas.

Its climate strategy states that companies it invests in must have a net zero 2050 target in place.

AP Pension hopes that its investments in firms with climate targets will help support the Paris Agreement’s goal of keeping global temperature increase to a maximum of 1.5 degrees.

Among the companies added to AP Pension’s exclusion list was Shell, in which AP Pension has investments worth DKK 91m.

In total, with the new stricter exclusion criteria, AP Pension will sell investments in eight fossil fuel companies for approximately DKK 310m.

The divestments took place during the first quarter of 2023, and include shares and corporate bonds.

AP Pension also identified four companies that are part of externally managed funds where AP Pension does not have a decisive influence on the portfolio.

The pension company has called for divestment from these firms, for a total amount of around DKK 4.5m.

“Companies in the fossil sector, including coal, utilities, tar sands and oil and gas, play a central role in the climate fight to achieve the Paris Agreement's goal of keeping temperature increases to a maximum of 1.5 degrees in 2050,” commented AP Pension head of responsible investments, Anna Maria Fibla Møller.

“That is why we are now tightening our grip on fossil investments, as we will not support companies that make it difficult to reach the target in the Paris Agreement.

“As a result of our new and tighter criteria, we are divesting oil and gas companies that invest in new oil and gas fields and that have not drawn up ambitious business plans to realign themselves in accordance with the objectives of the Paris Agreement.

“This is, for example, the case with Shell and TotalEnergies, which we are now divesting.

“It is a dilemma for AP Pension how we best handle oil and gas companies that invest in new oil and gas fields in our investment universe.

“On the one hand, these companies have a large negative impact on the climate, but on the other hand, we are willing to invest in those companies that have a credible plan to transform their business so that it is compatible with the Paris Agreement.

“A concrete example is Eni, which we are invested in and have chosen to put on our watch list. In addition to monitoring the company closely, we will also increase our efforts within active ownership.”

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