Largest Swedish Pension Fund Divests from Fossil Fuel
AP2 has announced plans to divest $116 million USD (SEK 840 million) worth of fossil fuel holdings in an effort to ward off the “financial risk” of climate change. Fossil Fuel investments being removed from their investment portfolio include oil and coal companies.
The Second AP Fund (AP2) is one of northern Europe’s largest pension funds. The Fund is tasked with an important assignment by the Swedish Government – maximizing the long-term return on Swedish pension assets. Andra AP-fonden AP2
According to EVA Halvarsson, CEO of AP2 “Our starting point for this analysis has been to determine the financial risks associated with the energy sector, and by not investing in a number of companies, we are reducing our exposure to risk constituted by fossil fuel based energy. This decision will help to protect the fund’s long-term return on investment.”
AP2 About Coal:
Coal companies “face considerable climate-related financial risk, due to the negative environmental and health impacts of coal”. AP2 also cited competition from gas and renewable energy sources as affecting demand for coal.”
AP2 About Oil:
“Serious climate-related financial risks” for a number of oil producers, particularly involving “high-cost projects” such as extracting oil from oil sands. AP2 said it believed it was “highly likely that these projects may either be stranded or unprofitable”.
The Swedish Pension announcement comes after other big fossil fuel divestment announcements by some other major institutional investors:
Stanford University: an $18.7 billion endowment divestment fossil fuel-related companies (May 2014)
Rockefeller Brothers fund: $860 million fossil fuel divestment (September 2014)
Wallace Global Fund and John Merck Fund (part of 17 philanthropic groups) announced plans to divest $1.8 billion from fossil-fuel companies and invest in clean-energy technology (January 2014)
Ellen Dorsey, executive director for the Wallace Global Fund, sums up the general consensus of these big institutional investors:
“The magnitude of the climate crisis requires that we no longer conduct business as usual,” and “If we own fossil fuels, we own climate change.”
Green-Eco-EV News Reporting by Ken Green Burridge
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