The German government continues to invest public pension and social security assets in oil, coal and gas companies on the equity market, despite announcing that it would switch to an ESG index by the end of the year.

According to a report by investigative documentary series Panorama, the German government invests a total of €573.59m in oil, gas and coal companies on the equity market to finance the pensions of civil servants.

The government has confirmed that it has invested more than €500m in coal, oil and gas stocks. The pension and social security assets are invested in multinational oil company ExxonMobil, according to documents issued by the Federal Ministry of the Interior, which is responsible for the investments of pensions and social security assets.

The assets are in the Versorgungsrücklage, a fund created to finance part of pension expenses for civil servants, the pension fund for judges and professional soldiers Versorgungsfonds, and a fund to stabilise contributions in the long-term, worth in total around €50bn, according to the report.

The government invests €10bn of pension assets in mainly equities but it also includes some fixed income assets, it added.

The report comes as the German government plans to transfer part of pension and social security assets invested in equities to the sustainable Euronext V.E ESG-World-select75 Bund/SV Index by the end of 2022.

It had also started to move pension and social security assets invested in the EuroStoxx 50 index to the S&P Eurozone Bund/SV Climate Transition ESG Select Index at the beginning of August last year.

Germany plans to achieve greenhouse gas neutrality, balancing greenhouse gas emissions and reduction, by 2045. It aims to achieve negative emissions, which means absorbing more greenhouse gases than it emits, after 2050.

Mathias von Gemmingen of the activist group Fossil Free Berlin said that “the government and especially the Federal Ministry of the Interior must sell its shares in all fossil companies immediately if it doesn’t want to be seen as a climate killer”.

He added: “On one hand the government tries to reduce greenhouse gas [emissions] with many big measures, and on the other the Interior Ministry with its equity [investments] supports and co-finances fossil fuel companies pushing up greenhouse gas emissions.”

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Luigi is IPE's Berlin-based DACH correspondent. His coverage includes regulation and the latest pensions and investments trends, and, being a native Italian, he also covers Italy’s pensions market. He has reported from Italy and Germany on international politics and business for European and US publications including USA Today, Bloomberg BNA and for the investigative magazine L’Espresso. He was previously Germany correspondent for Mergermarket covering M&A.View full Profile

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