BlackRock loses €5bn Dutch equity mandate over climate misalignment

Dutch pension fund PME, which invests around €59bn on behalf of steel and metal workers in the Netherlands, has announced an overhaul of its equity portfolio resulting in the effective divestment from BlackRock across its equity holdings.

Instead, PME will expand its existing commitments with Dutch manager MN and Swiss firm UBS, in a bid to select a smaller number of asset managers who are more aligned with its climate beliefs, the pension fund said in a statement released on Monday.

‘As part of our strategy to invest for a good pension, we make deliberate choices about the companies included in our equity portfolio. We aim for a portfolio with a limited number of stocks, enabling us to better understand our investments and pursue an improved balance between risk, return, and sustainability,’ the fund said. It added that the changes would not impact its risk and return expectations. Instead, the fund anticipates a small saving on manager fees due to the reduction in the number of managers.

The move echoes a decision by Dutch pension fund PFZW, which announced in September that it would sell some of its holdings in BlackRock and other managers as part of a wider shift towards a more concentrated portfolio of aligned managers.

PME currently has some 37% (around €22bn) of its overall portfolio invested in equities and 52% in fixed income assets. The move comes ahead of a planned transition of the country’s defined benefit funds into a new pension system, effectively turning defined benefit funds like PME into collective defined contribution funds from January 2027.

PME has faced sustained pressure from climate campaigners in the Netherlands to terminate its relationship with BlackRock. The US manager, whose CEO Larry Fink once described climate risk as an investment risk, has in recent months distanced itself from public support of climate causes amid growing political and legal backlash in the US. In January, the manager, which manages €13.5bn in assets, confirmed its decision to depart from the Net Zero Asset Managers Initiative, which suspended its activities shortly after the announcement.

The US manager continues to invest in renewable infrastructure, but has also increased its investments in new bonds issued by fossil fuel producers by nearly $1bn over the past year, according to research by Reclaim Finance. 

A spokesperson for BlackRock told Net Zero Investor, in response to PME’s announcement, that the manager continues to manage more than €350bn for Dutch clients and was proud to continue its growth in the country. ‘BlackRock has been entrusted by clients in the Netherlands and around the world to manage more sustainable and transition assets than any other asset manager,’ they said, adding that the firm’s EMEA business has reported a record year through Q3, with some $129bn in net new business in the first three quarters, of which nearly a quarter was invested in sustainable funds.

The move was welcomed by climate campaigners, who had lobbied for divestment from large US managers including BlackRock and State Street. More than 2,000 Dutch pensioners signed a public letter by Fossielvrij Nederland (Fossil Free Netherlands) to their funds, including PME, urging them to divest from BlackRock.

‘PME has made a very wise decision in showing BlackRock the door. The asset management giant has succumbed to Trump’s fossil fuel agenda: as a shareholder, it votes down climate resolutions and as an investor, it keeps the fossil fuel tap wide open. In doing so, it is exacerbating the climate crisis, even though every pension fund knows that extreme weather threatens our pension assets,’ said Hiske Arts, campaign lead at Fossielvrij Nederland’s Break with BlackRock campaign.

The campaign group said it is now turning its efforts to ABP, the largest pension fund in the Netherlands and across Europe, with a combined €520bn in assets, to divest from BlackRock. ABP remains invested with BlackRock for some of its equity and emerging market debt holdings.