PMT Energy Program Starts With 49 Oil and Gas Firms, Ends With 9

The $80 billion Dutch pension fund defends keeping shares of BP and Shell after 2-year and says talking to companies is often more effective than divestment.

Dutch pension fund Pensioenfonds Metaal en Techniek, or PMT, has “said goodbye” to 40 oil and gas companies within its portfolio but will continue to invest in nine.

PMT, one of the largest pension funds in the Netherlands with 74.2 billion euros ($80 billion) in invested capital, announced it recently concluded an energy transition engagement program that began in November 2021 with 49 companies in its oil and gas sector portfolio and ended with just nine.

The nine companies the pension fund chose to hang onto include oil and gas giants BP and Shell, along with former Italian state-owned oil company Eni. The others are Norwegian oil exploration and development company Aker BP ASA, oil pipeline owner Enbridge, Norwegian petroleum refiner Equinor, Portuguese oil and gas company Galp Energia, Finnish oil refiner Neste and OMV, an Austrian oil, gas and petrochemical company.

“We need many more major investments and action plans from all sectors in the energy transition,” Hartwig Liersch, PMT’s investment director, said in a statement. “Pre-eminently large oil and gas companies have the capital, infrastructure and knowledge to contribute. … It is important that multinationals such as Shell, despite the fact that they are still moving slowly through the energy transition, are part of the solution.”

As part of the engagement program, the companies were asked to abide by a “1.5-degree path” and set intermediate targets, while utilities with a large share of coal-fired power generation were asked to provide a coal phase-out plan in line with guidance from the Intergovernmental Panel on Climate Change. According to PMT, the decision to keep companies in the equity portfolio was based on 13 indicators, including long-term carbon reduction targets, and a strong energy transition strategy. Integrated oil and gas companies were also expected not to develop new oil fields after 2025.

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news. 

Of the nine companies selected to continue, “PMT sees that they have made progress during the engagement program,” according to a pension fund statement. The remaining companies are the “most promising for PMT in this sector” because they meet its requirements in publicly stating an ambition to reach net zero of greenhouse gas emissions by 2050, as well as having “sufficiently substantiated” reduction and action plans.

“PMT still believes that talking to companies in which they invest often has more effect than selling the shares and leaving the company,” the pension fund stated. “The supporters, employers and participants also expect PMT to continue discussions and not simply exclude companies or a sector.”