Environmental-minded Danish pension fund PKA ($46 billion), after divesting stocks in coal companies over the past two years, now has dropped 35 oil firms from its portfolio. Its next plans are for the automotive industry.
According to Reuters, some of the crop of freshly cut stocks include Anadarko, Chesapeake Energy, Marathon Oil, Apache, Gazprom, Inpex, Lukoil, Rosneft, and Sinopec.
The fund wants the car makers to enlarge their fleets of electric and hybrid vehicles. It characterized its upcoming action on autos in market terms. Fund CEO Peter Damgaard Jensen said in a statement that “electric cars will be more attractive to consumers in line with technological developments in the long run.”
Inspiring the fund is the Paris Agreement, which seeks to keep the global temperature rise this century well below 2 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial levels, by focusing on renewable energy. To help curb emissions and keep the agreement’s goal on track, the International Energy Agency estimates that there should be 600 million electric and hybrid cars on the streets by 2040. Today, there are roughly 2 million such vehicles. In all, autos represent approximately 16% of global carbon emissions.
PKA began its environmental, social, and governance crusade in 2011 by investing in offshore wind and turbine power. Since then, the fund has cut 40 oil and gas businesses and 70 coal companies. But the pension plan has not ruled out ever investing in non-renewable energy, and has started talks with some of them about moving in a greener direction.
Growing out of those discussions is a framework the fund will use going forward to assess whether to invest in a company. PKA now will look at how a company is managing climate-related risks, whether it is open to dialogue with the fund, and how well it is working to meet the goals of the Paris accord.
Tags: Divestment, ESG, oil, Paris agreement, Pension, PKA