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Dutch pension fund ABP to sell $17.5 billion of fossil fuel assets

Dutch pension fund ABP to sell $17.5 billion of fossil fuel assets
Dutch pension fund ABP to sell $17.5 billion of fossil fuel assets   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p><span class="caps">AMSTERDAM</span> – Dutch pension fund <span class="caps">ABP</span>, one of the world’s largest, will divest 15 billion euros ($17.5 billion) of investments in fossil fuel producers by 2023, it said on Tuesday, citing concern over global warming.</p> <p>The decision ahead of next week’s COP26 United Nations climate conference marks a major turnaround for the civil servants’ fund, which has 528 billion euros in assets under management. </p> <p>As recently as June <span class="caps">ABP</span> had said that exiting fossil fuel investments was “not the solution” to global warming, despite pressure from environmental activists and a growing number of the fund’s own participants.</p> <p>After the planned sale, which represents 3% of the fund’s total assets, <span class="caps">ABP</span> intends to increase investment in renewable energy where possible, Chairman Corien Wortmann said in a statement.</p> <p>Asked about the turnaround, Wortmann told national broadcaster <span class="caps">NOS</span> it had been prompted by rising concerns about climate change and the most recent UN climate report.</p> <p>“The earth is projected to heat up by 1.5 degrees already within seven years. That means a radical chance is needed and that is partly the reason why we are now announcing this chance of course,” Wortmann said. </p> <p>The Dutch move came as asset managers Fidelity International and BlackRock also announced a tighter focus on emissions ahead of the COP26 talks in Scotland.</p> <p>Announcing Tuesday’s decision, Wortmann cited concerns of fund participants and their employers.</p> <p>“The <span class="caps">ABP</span> Board sees the need and urgency for a change of course,” she said. “We (are parting) with our investments in fossil fuel producers because we see insufficient opportunity for us as a shareholder to push for the necessary significant acceleration of the energy transition at these companies.”</p> <p>She said that in the future the fund would focus on engagement with large consumers of fossil fuel such as electricity companies and the automobile and aviation industries. </p> <p>“Using our influence as a shareholder, <span class="caps">ABP</span> will encourage companies that use fossil fuels to become more sustainable.”</p> <p>The fund said it did not expect the decision to affect its long-term returns.</p> <p>($1 = 0.8593 euros)</p> <p/> </div>