In brief: Danish academic pension P+ to exclude new fossil fuel extraction companies

Danish academics’ pension P+ is the latest institutional investor to exclude new investments into fossil fuel extraction.

Pensionskassen for Akademikere, which has assets worth DKr160 billion ($23.2 billion; €21.4 billion), will not make new investments into companies that establish new oil or gas fields or new coal power plants, according to a LinkedIn post by P+ board member Katrine Ehnhuus. The decision was the result of a P+ members’ vote at a general assembly last week, with the majority of members voting for the exclusion.

The New York City Employees Retirement System, the Teachers’ Retirement System of the City of New York and the Wellcome Trust are among only a handful of investors to have announced that they are entirely excluding all forms of fossil fuel production for new private markets investment decisions. Many investors, such as the Vermont Pension Investment Commission, the Church of England Pensions Board and are either considering such a blanket ban or have classified exclusion as a last resort after engaging with assets or managers on decarbonisation.

CalPERS, for example, has taken the position that fossil fuels are “an important near-term component of the global economy and contribute to energy security”, according to its net-zero strategy, proposed last year. Fossil fuel assets are also “an important source of portfolio diversification”, a memo on the strategy seen by NPM states.

One of the key sticking points is natural gas, which is viewed by many investors as a transition fuel because it is less carbon intensive than burning coal.

P+ does not disclose its allocation to private markets, but it has made commitments to Copenhagen Infrastructure Partners’ first Green Credit Fund, Actis’ Long Life infrastructure and second Asia real estate funds in the past two years, PEI Group‘s database shows. The pension had not responded to a request for comment prior to publication.