Denmark’s PenSam Excludes 26 More Oil Firms

Fund keeps Shell and BP for now, but it will still watch the companies it did not divest from to see if—and how—their ESG efforts are improving.

PenSam, Denmark’s $17 billion labor pension fund, is excluding 26 more oil companies in support of the Paris Agreement’s climate goals.

Divestments from 12 firms totalled about $19.7 million. PenSam has removed 100 oil, coal, and tar sands businesses from its portfolio since 2016.

Some of the new exclusions include Hess, Marathon Oil, and OMV Oil. The fund recently set a goal to have 10% of its portfolio invested in companies supporting a “green transition,” meaning also keeping plans in line with the accords, by 2025.

The Paris Agreement wants to keep the global temperature rise this century well below 2 degrees Celsius above pre-industrial levels.

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“When we choose to exclude and sell oil companies, it is about investing our members’ pension responsibly and backing on a future where the energy goes from black to green,” says Torsten Fels, chief executive officer of PenSam.

The plan did not completely divest, as it sees some oil necessary as long as those firms are open to a greener mission (Royal Dutch Shell and BP are some businesses it has decided to stick with). ExxonMobil is one of 14 other gas giants on the new 26-firm exclusion list that will no longer receive investments from PenSam.

“As a responsible investor, we support the companies that change their minds to meet the objectives of the Paris Agreement, and therefore we have chosen to keep a number of companies related to oil,” Fels said.

PenSam chose which companies it would divest from and exclude based on a data tool created by Carbon Tracker, an environmental, social, and governance (ESG) think tank.

The fund said it will “continuously analyze” the progress of the still-vested oil firms, and further exclusion and divestment is possible.

“We are constantly working to integrate the Paris Agreement into our investment work, which means that we both make our investments greener, but that also means that we must part with the companies that can either become a poor investment or directly counteracts the objectives of the Paris Agreement, ” Fels said.

PenSam covers the retirement assets of mostly public workers in the health, social care, and education sectors.

Tags: Climate Change, Denmark, Divestment, ESG, oil, Paris agreement, PenSam, Pension