Sampension cuts US exposure in fossil fuel investment revamp

Danish pension fund Sampension is set to exclude seven American upstream companies in a bid to revamp its fossil fuel investment plans. While company names were not disclosed, Sampension has said it will simultaneously maintain exposure to seven European majors – Aker BP, BP, Eni, Equinor, OMV, Repsol and Shell.

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Additional exclusions also apply to two undisclosed companies, one Chinese and another European.

The fund says the war in Iran contributed to its decision.  “As we see it, the Iran war - in continuation of the Ukraine war - has emphasized the need for European investors to have a nuanced approach to fossil investments”, said Mads Smith Hansen, the fund’s chief executive.

Hansen notes the war has prompted the asset owner to balance European energy security against Europe’s energy transition.

“In our opinion, the seven European companies that remain in the portfolio make sense to hold on to. Both because they are important for European energy supply security, and because, based on the analysis, we assess that despite an otherwise worrying development, there is a basis for influencing them in a more sustainable direction - which is clearly still needed”, he explained.

Hansen points out that maintaining exposure to the seven European companies does not imply changes in expectations.

“It is important to emphasize that our patience with these companies is of course not infinite. And therefore, we will also continuously reconsider our investments if we do not see the progress that we expect from the companies”, he adds.

Sampension has committed to a net zero by 2050 target while aiming to cut emissions by at least 45% by 2030. The fund has also set revenue thresholds for investments in coal mining.

Dead end

Hansen says dialogue with American upstream companies had reached a ‘dead end’. By holding European assets, the fund hopes to exert influence through engagement and dialogue.

In a statement, the fund cited evidence from this year’s annual general meetings season. Sampension says it supported several climate-related shareholder resolutions including one at Equinor.

“We naturally expect companies to take their climate responsibility and work seriously with the green transition. Unfortunately, several of them have moved in the wrong direction in this area in recent years”, he says.

Hansen also noted the political responsibility attached to Europe’s transition. “At the same time, it is also quite obviously necessary to ensure that the framework conditions support the green transition. It is a political responsibility to ensure this”, he says.

Hansen says Arctic oil and gas exploration is a case in point. Earlier this month, Sampension had joined other pension investors in jointly warning lawmakers against further oil and gas exploration in the Arctic.

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