Denmark’s Magistre & Psykologer (MP) Pension has dumped 10 of the world’s biggest oil firms, continuing its green investment goals.
The 10 companies the plan excluded are ExxonMobil, BP, Chevron, PetroChina, Rosneft, Royal Dutch Shell, Sinopec, Total, Petrobras, and Equinor.
“MP Pension wants to take responsibility for the green transition and secure the members’ long-term return,” the fund said in regards to the ESG divestment.. The $20 billion plan said it removed the 10 companies because MP believes that the oil firms’ long-term business models are not compatible with the goals of the Paris Agreement, which seeks to reduce the world’s carbon footprint as a means to stave off climate change.
Last year, the plan’s board of directors decided to sell shares in oil, coal, and tar sands companies if MP deemed their goals to be unaligned with the Paris Agreement. Companies that are cooperating with the Paris goals are exempt from being divested. The pension has given itself until 2020 to decide which companies will be sold.
“We must assess over 1,000 oil companies by the end of 2020. That is why we have had a special focus on the world’s ten largest oil companies. The total market capitalization of these ten companies exceeds DKK 9,200 billion. MP’s share in the ten companies amounts to DKK 644 million ($95.3 million). This corresponds to 2/3 of all MP’s equity investments in oil,” said Anders Schelde, the fund’s chief investment officer.
“In the MP’s estimation, all this data shows that the ten companies are not and cannot be compatible with the Paris agreement by the end of 2020. Of course, we have considered whether we should wait to sell the shares until 2020, as there can be a positive turnaround. But we would rather draw a line in the sand now that we do not believe in this context that we can influence the companies further by the end of 2020, ”said Schelde.
Should their practices improve, MP could eventually reinvest in the companies.
“We hope that these ten companies will take the green transition much more seriously and that they will take on a much greater responsibility to convert their businesses into renewable energy. When they hopefully have done so, we would very much like to invest in the same companies again. But it requires a significant change in all ten companies, ” Schelde said.
Other Danish funds have divested from coal, tar sands, and oil recently. In July, $17 billion PenSam added 26 more oil firms to its exclusion list, which also adheres to the Paris Agreement’s goals.
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