ABP sells investments in fossil energy – Former director expects next steps in other energy-intensive sectors – Foodlog

The General Civil Pension Fund (ABP), the pension fund for 3 million civil servants and teachers and one of the largest investors in our country, will stop investing in makers of fossil fuels, such as oil and gas companies and coal-fired power stations. The reason is the latest report from the UN climate panel IPCC. According to the ABP, the transition to non-fossil energy should be accelerated.

ABP is gradually moving out of its fossil portfolio of 15 billion euros in order to nevertheless be able to earn as much as possible from it. The fund expects to be released in April 2023.

On the NOS Radio 1 Journaal, chairman of the board Corien Wortmann of the ABP said: “Over the past period we have spoken a lot with groups of participants, employers, scientists. We experience a lot of support for taking this step now.”

The ABP takes the decision at a time when the prices of oil and gas-based energy are high. This is a result of shortages in production and storage, but also of sustainability (stopping extraction, including in the Netherlands but also in the US). Renewable energy to make up for the shortages is not enough.

Whether the world as we think of it in prosperity can ever run on renewable energy is a discussion that is still rarely conducted. Yet there is doubt. For that reason, the conversation about nuclear forms of energy is getting going again. That energy source has been blocked in public and political opinion by environmentally conscious campaigns in the 1970s and 1980s, so that its potential has not been developed.

The Telegraph notes criticism from investment experts. By withdrawing, the ABP would leave the course of fossil energy companies entirely to politics. Earlier, smaller Dutch pension funds withdrew (such as the FME, for the metal industry).

One of the critics is Jac Kragt, former ABP board member and associate professor of sustainable investment at Tilburg University, who expects “a next step”. Kragt suspects that pension funds will start looking in the same way at industries that consume a lot of fossil energy. “You have to think about,” says Kragt, “above what percentage of fossil energy you still want an industry as an investment. Then it is obvious that you look at the car sector or at utilities that use a relatively large amount of coal.”

If fossil fuel divestments by major investors become a trend and accelerate faster than renewable energy sources build up, cynical investors will get rich. Society will then structurally experience that the energy transition is not a matter of ‘deciding something’, but requires careful planning and must actually be physically possible. Current gas price inflation shows the price and scarcity effects that could arise.

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ABP sells investments in fossil energy – Former director expects next steps in other energy-intensive sectors – Foodlog