McMaster University, Dutch pension fund PFZW, the New York State Common Retirement Fund, and Ahold Delhaize Pension Fund are all making significant strides in divesting from fossil fuel companies and increasing their sustainable investments.
McMaster University has successfully reduced the carbon intensity of its investments by 70% from 2018 levels, surpassing its original goal of 65% by 2025. The university has divested from higher-carbon holdings and decreased its holdings in the Carbon Underground 200 (CU200) to 1.6% from 2.7% last year. McMaster has invested $10 million in a global fund that focuses on infrastructure projects like wind and solar, with plans to increase the investment to $30 million in the future. The university aims to accelerate the decarbonization of its investment portfolio in a comprehensive and financially responsible way. Saher Fazilat, Vice-President (Operations and Finance), expresses pride in McMaster's responsible investing achievements while maintaining financial responsibility [52fdaacb].
Dutch pension fund PFZW has completed a $3.02 billion divestment of stakes in fossil fuel companies, leaving only seven oil and gas firms in its portfolio. The divestments mark the completion of a two-year program for PFZW, which sold its stakes in 310 companies, including oil majors such as Shell plc, BP plc, and TotalEnergies SE. PFZW Chair Joanne Kellermann said that most fossil fuel companies are not prepared to adapt their business models to the Paris Climate Agreement. PFZW is now looking at 'large fossil fuel consumers' such as power companies and material producers with a high carbon footprint, urging them to 'develop ambitious transition strategies' that align with the goals of the Paris Climate Agreement. PFZW is working towards a climate-neutral investment portfolio by 2050 and is targeting a 50 percent absolute carbon reduction by 2030 for equities, liquid credit, and real estate [52fdaacb] [49942ad7].
The New York State Common Retirement Fund, under the leadership of New York State Comptroller Tom DiNapoli, has also taken action to hold fossil fuel companies accountable on climate change. The Fund is divesting from ExxonMobil due to its failed energy transition plan. Additionally, the Fund is doubling its sustainable investment portfolio from $20 billion to $40 billion. The Fund has reviewed the sustainability plans of all oil and gas majors and is moving $10 billion out of passive indexes into sustainably mandated funds. The Fund will no longer allow investments from its private equity portfolio to be invested in fossil fuels. The Fund's overall decision leaves it holding $500 million in carbon-exposed companies. The Fund's actions are important for retirees, state and local governments, and taxpayers. The program to hold fossil fuel companies accountable will now move to utilities. The Fund will continue to annually review fossil fuel companies in its portfolio. The divestment scope is considered too small and the pace of change inadequate. The Fund's actions reflect the declining relevance of fossil fuels to investors [9caf94e1].
Ahold Delhaize Pension Fund, based in the Netherlands, is also making progress in its climate-focused investments and the change in the Dutch pension system. Eric Huizing, the chief investment officer at Ahold Delhaize Pensioen, explains that the pension fund has been actively reducing its carbon footprint and investing in climate solutions. Ahold Delhaize Pension Fund has divested from coal and tar sands and is actively engaging with companies to push for climate action. The fund is also investing in renewable energy and sustainable infrastructure projects. Huizing emphasizes the importance of collaboration and engagement with other investors, policymakers, and companies to drive system change and create a sustainable future [f0326d50].
These divestments and carbon reduction efforts by McMaster University, PFZW, the New York State Common Retirement Fund, and Ahold Delhaize Pension Fund demonstrate their commitment to sustainable investing and aligning their portfolios with the goals of the Paris Climate Agreement. By divesting from fossil fuel companies and investing in renewable energy, infrastructure projects, and lower-carbon indexes, these institutions are taking significant steps towards reducing their carbon footprints and contributing to a greener future.