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MP Pension to divest all equity holdings in fossil-fuel companies

Smoke stacks seen at an RWE coal power station near Bergheim, Germany, Saturday, September 24, 2005. The U.K., Europe’s third-largest power market, should turn to technologies that remove carbon dioxide from fossil fuels rather than nuclear generation, Environment Minister Elliot Morley said. Photographer: Wolfgang von Brauchitsch/Bloomberg News

MP Pension, Gentofte, Denmark, will divest its stock holdings from 1,000 companies linked to fossil fuels, the 114 billion Danish kroner ($18.8 billion) pension fund said in a news release Monday.

The board of the Danish pension fund for academics decided to sell off all of the shares in oil, coal and tar sands companies to support the global efforts to limit the average global temperature increase to 2 degrees Celsius, agreed by investors under Paris agreement in 2015. As a result, assets linked to coal and tar sands will leave MP's portfolios by the end of the year. Oil shares will be sold by Dec. 31, 2020.

"Our ambition is to deliver the highest possible returns for our members, based on responsible investments. Our analysis also shows that this decision will benefit the overall long-term return," CEO Jens Munch Holst said in the release.

The divestment will free up more than 1 billion Danish kroner, which will be reinvested. MP Pension also plans to increase its 3.5 billion Danish kroner green investments portfolio, it said in the release.

A spokesman could not be reached to provide additional details.