Danish pension provider Lærernes Pension, Hellerup, is divesting in some fossil fuel companies following a new investment policy for that sector, it said Nov. 25 in a statement on its website.
Lærernes Pension manages 146.1 Danish kroner ($20.4 billion) in teacher pensions. As a result of the new policy, it will sell roughly 2 billion kroner held in fossil fuel companies.
It will not divest companies that commit to a transition compatible with the goals of Paris Agreement, but noted it "is a complex assessment," the statement said.
"There is a long way to go from long-term objectives and calculation of CO2 emissions to determining sub-goals and concrete plans, and then to finding the right commercial solutions to reach the target — and finally to seeing the change reflected in the companies' CO2 emissions."
The policy applies to thermal coal, oil and gas extractors and producers, including companies that rely on more than 5% of those energy sources. Most of the divestment will be completed by the end of the year, and those proceeds will be invested in other companies, it said.
"Even though the new criteria mean that we exclude a large number of companies, we believe that we still have good opportunities to ensure a good return on pension savings. Our investments will continue to be spread across thousands of companies. In addition, the exclusions may reduce teachers' pension's risk of loss caused by companies' failure to adapt business models," the statement said.
The pension manager said that it also wants "to influence companies to adapt" by setting targets for CO2 reduction.