Dutch pension fund PFZW has retained its investments in seven oil and gas companies that it believes are “convincingly committed” to sustainable energy or primarily produce energy with a low carbon footprint.

At the end of 2023, the pension fund completed its two-year engagement programme targeting fossil fuel firms.

In PFZW’s opinion, the oil and gas companies in which it still invests in (Cosan S.A., Galp Energia, Granuul Invest, Neste Oyj, OMV A.G., Raízen S.A. and Worley Limited) are the “real leaders” in the sector and have provided compelling climate transition strategies.

All the remaining oil and gas firms have been divested from, totalling 310 companies that PFZW felt did not comply with the Paris Climate Agreement, with a total value of €2.8bn.

PFZW said that these divestments contribute to its goal of investing in more companies that play a positive role in the global energy transition.

Following the divestments, the pension fund stated that it was increasingly investing in companies that positively contribute to the climate and energy transition, aiding PFZW’s target of having 15 per cent of its assets invested in climate solutions by 2030.

It will allocate €2bn over the next two years to investments in companies with measurable impact on the climate and energy transition.

With the completion of the two-year programme, PFZW’s attention has turned to the large fossil fuel consumers, such as power companies and producers of materials with a high carbon footprint.

It will ask these companies to develop ambitious transition strategies to contribute to the goals of the Paris Climate Agreement.

The pension fund is working towards a climate-neutral investment portfolio by 2050, and targeting a 50 per cent absolute carbon reduction by 2030 for equities, liquid credit and real estate.

“The intensive shareholder dialogue over the past two years with the oil and gas sector on climate has made it clear to us that most fossil fuel companies are not prepared to adapt their business models to ‘Paris’,” said PFZW board chair, Joanne Kellermann.

“While the largest companies in this sector do invest in sustainable forms of energy, the switch from fossil to low carbon is not nearly fast enough. Incidentally, this reflects the slow pace we see globally in the transition to renewable energy.

“The seven companies we will continue to invest in are the only ones that show a switch is possible. At the same time, it is disappointing that there are only seven.

“We encourage the biggest players in the oil and gas sector to also accelerate the switch to a cleaner energy mix. During the COP28, it was once again concluded that haste is an absolute necessity. In addition, many of our participants let us know that they value a rapid energy transition.”

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