Since October 2021, ABP has sold 9 billion worth of shares and bonds in fossil companies. This means that the pension fund for civil servants is no longer a shareholder in companies such as Shell, BP and Total. It is striking that precisely after the announced sale, these oil and gas companies booked record profits in 2022 and their share prices skyrocketed.
The pension fund of 3 million participants announced this on Tuesday afternoon. The majority of the 15 billion euros in fossil investments has therefore been sold since the ABP decided in October 2021 to exit fossil investments. According to ABP, sales started at the end of 2021 and took place mainly in the autumn of 2022 last year.
After the 9 billion euros, another 1 billion euros will follow this year in fossil investments in emerging markets. They were more difficult to sell quickly. And another 5.6 billion euros in fossil investments cannot be sold in the near future. For example, they are put into power plants and contracts are not easy to sell.
It is striking that the sale of the fossil shares took place exactly in a record year for oil and gas companies. They benefited from price increases after the Russian invasion of Ukraine. Companies such as Shell, BP, ExxonMobil and Total each made profits of tens of billions.
And the share prices of oil and gas companies rose sharply, at Shell, for example, by no less than 42 percent throughout 2022. This while it was an exceptionally bad stock market year for many shares, in which tech companies, for example, struggled with rising interest rates and saw their prices plummet. Well-known oil and gas companies also announced in early 2023 that they would pay billions in additional dividends.
2022 was also a very bad investment year for ABP with a negative return of 17.6 percent. The invested capital fell by no less than 97 billion euros in value. Fortunately, the value of future benefits also fell rapidly due to interest rate rises.
ABP did not consider a postponement due to mega profits in the oil and gas sector
Even after the start of the war in Ukraine, the ABP has not considered postponing the share sale. “We are a long-term investor. And we want to contribute to the Paris climate goals, partly through this sale. Our pension participants want that too.”
The spokesperson cannot say in what sense the ABP has benefited even more from the billions in sales of fossil shares due to the higher prices in 2022. “But we did sell at high prices due to the price increases.”
In the past, exercising influence as a shareholder in fossil companies was always the argument for holding on to investments. But that’s over. “The fact that we no longer invest in the major fossil fuel producers also means that we no longer vote at shareholder meetings.”
