September 4, 2019 / 7:07 AM / a month ago

Danish pension fund excludes top oil firms on climate concerns

FILE PHOTO: An Exxon sign is seen at a gas station in the Chicago suburb of Norridge, Illinois, U.S., October 27, 2016. REUTERS/Jim Young/File Photo GLOBAL BUSINESS WEEK AHEAD

COPENHAGEN (Reuters) - Danish pension fund MP Pension said on Tuesday it would sell its stakes in 10 of the world’s biggest oil firms as it seeks to divest major sources of carbon emissions from its portfolio.

MP Pension said it would sell its stakes in ExxonMobil, BP, Chevron, PetroChina, Rosneft, Royal Dutch Shell, Sinopec, Total, Petrobras and Equinor.

“The divestment happens because MP assesses that the companies’ long-term business models are incompatible with the climate goals set in the Paris Agreement,” it said in a statement.

Almost 200 nations agreed in Paris in 2015 to limit the global average temperature rise to well below 2 degrees Celsius above pre-industrial times. Current policies put the world on track for at least a 3C rise by the end of the century.

The divestment amounts to a total of 644 million Danish crowns ($96.24 million), or around two thirds of MP Pension’s equity holdings in oil.

MP Pension said its decision was not only based on a desire to contribute to the green transition, but also on its belief that the companies cannot deliver a return on a level with the broader market in the coming years.

“Demand for oil will fall as the green transition gathers speed,” said MP Pension’s investment chief Anders Schelde.

MP Pension said four of the companies - BP, Royal Dutch Shell, Total and Equinor - had shown signs of progress, while the remaining six had made little headway in moving to greener energy.

$1 = 6.6914 Danish crowns

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