PFA, Denmark’s biggest pension fund, has revealed it has divested its entire holding in Shell, citing recent disappointment with the oil and gas giant’s climate stance – but does not rule out re-investing later on.
The DKK778bn (€104bn) commercial pension provider had a holding of DKK1.2bn in Shell at the end of 2023, and has sold all shares in the London-listed company over the last few weeks, according to a report in Danish financial daily Børsen, the contents of which a PFA spokesman confirmed to IPE.
Rasmus Bessing, director of PFA Asset Management and head of ESG, said in the article: “Shell has become less ambitious with its 2030 goals, it has not been clear about its capital allocation to green technology, and so our assessment is that we can have more influence overall if we use our efforts on active ownership in some other companies.”
Two years ago, PFA said it had reduced its exposure to oil and gas companies to only two stocks – Royal Dutch Shell and TotalEnergies – reasoning that this enabled it to concentrate it active ownership efforts.
Six months later, it doubled its holding in Shell, according to Børsen.
In mid-March this year, Shell backtracked on its 2030 climate target, lowering its emissions reduction goal to 15-20% by 2030 from the previous target of 20%, and scrapped its emissions reduction target of 45% by 2035.
Total Energies is now the only oil and gas stock PFA has left in its portfolio – a holding that is PFA’s eighth largest investment.
However, Bessing told Børsen he believed Shell was one of the best fossil fuel companies when it came to adapting to a greener world, so he did not rule out PFA investing in the company again at a later stage.
“It will require the clarity that we believe is necessary in relation to the green transition, and for us also to think, at that time, that it is an interesting investment from a financial perspective,” he said.
Bessing said Shell had been “a good investment for PFA’s customers”, but said it was hard to give a precise figure for the profit the Danish pension fund had made from the recent sale of the stake, since the oil company had been in PFA’s portfolio for many years.
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