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September 5, 2019 | Sign of Our Times: Pensions Blacklisting Oil Companies

Danielle Park

Portfolio Manager and President of Venable Park Investment Counsel ( Ms Park is a financial analyst, attorney, finance author and regular guest on North American media. She is also the author of the best-selling myth-busting book "Juggling Dynamite: An insider's wisdom on money management, markets and wealth that lasts," and a popular daily financial blog:

The movement of investors to divest of their holdings in fossil fuel companies has gathered pace in the last five years.  Notable converts to date include: Norway’s national oil fund which is refocusing on renewable energy, two-thirds of the UK’s university pension funds, as well as other public pension funds, including the Irish infrastructure fund, the New York state pension fund, and UK local authorities including Waltham Forest and Southwark.  See:  UK Parliament pension fund takes first step towards fossil fuel divestment.

This month the Danish pension fund for academics, MP Pension, blacklisted 10 of the world’s largest oil firms, which will mean their divesting of DKK644m (€86m) of stocks. The fund is next looking at the impact of divesting their oil company bond holdings as well.  More of this will come.  See MP Pension, blacklists oil companies including Shell, BP and Exxon:

The fund said it wanted to take responsibility for the green transition while securing long-term investment returns.

Anders Schelde, CIO of MP Pension, said: “We do not believe that this sector can deliver a return on a par with the rest of the market in the coming years.

“The demand for fossil fuels, including oil, will decrease as the green transition accelerates.”

The 10 companies are ExxonMobil, BP, Chevron, PetroChina, Rosneft, Royal Dutch Shell, Sinopec, Total, Petrobras and Equinor.

“The total market capitalisation of these 10 companies exceeds DKK9.2trn,” Schelde said.

The pension fund said it had been collecting data on the firms’ contribution to the green transition and found that BP, Royal Dutch Shell, Total and Equinor were taking steps towards transitioning towards a low-carbon economy. The other six had no – or very limited – initiatives to support the transition to a low-carbon economy.”

Change is an essential part of evolution.  Individuals and countries can either anticipate and evolve with change, or deny and be caught unprepared.  Capital investment and jobs are moving to the renewable energy, green tech space where growth opportunities abound.

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September 5th, 2019

Posted In: Juggling Dynamite

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