Dutch pension fund Pensioenfonds van de Metalektro, The Hague, Netherlands, has divested all fossil-fuel oil and gas holdings as part of its climate policy, it said Friday.
PME said in the announcement that the move will not affect expected returns for the €61.7 billion ($72.2 billion) pension fund, which is 102.6% funded.
PME's shares of fossil-fuel oil and gas companies have already shrunk, between engagement and exclusion efforts, said Marcel Andringa, executive director of balance sheet and asset management, in the announcement. "Now we have completely said goodbye to our interest in fossil oil and gas companies," Mr. Andringa said. It will not impact PME's risk profile because "climate change is a real risk within our investment portfolio," he said.
PME officials pledged to continue engaging companies on climate change but will now focus on large consumers of fossil-fuel energy. "They have the prospect of action, and they are expected to move the beacons towards a clean-energy system," the announcement said.
PME Chairman Eric Uijen said in a video interview that the pension fund will invest more in sectors that help with the energy transition, such as grid management and energy storage. "Our ambitious climate policy and a good pension go very well together," Mr. Uijen said.
Its sustainable investing policy calls for mapping annual reductions in the carbon dioxide footprint of the equity portfolio and by 2025 reducing it by 50% vs. 2015 levels. PME also makes an annual commitment of €250 million to impact investments, including those contributing to energy transition.
PME research found that pension fund participants and employers support a stricter climate policy. PME also noted that recent court rulings against several fossil-fuel companies "show that international climate agreements are not without obligation."