Germany’s nuclear waste management fund KENFO has brushed off claims of a poorly effective and non-transparent sustainable investment strategy included in a study conducted by Greenpeace referring to future investments of the first pillar generational capital equity fund (Generationenkapital).
KENFO disagrees with many statements in the study conducted by Greenpeace, or that cannot technically understand, the fund said.
“What is particularly problematic is that the entire study ignores the question of how sustainability approaches and mechanisms impact the compositions of the [investment] portfolio, potential conflicts with return targets and risk parameters,” it added in a statement.
KENFO will balance return targets and effective implementation of sustainability criteria when investing the Generationenkapital’s assets, it said.
According to Greenpeace, the result of the study raised doubts about the effective implementation of KENFO’s sustainability strategy, which remains “too vague in key points” while essential information, for example on CO2, individual stock positions, and benchmark allocations, is not published.
KENFO invests €1.29bn (5.5% of the total assets) in controversial companies, such as meat processing company JBS and SaudiAramco, the study added. Greenpeace has called for KENFO to urgently act to ensure that Generationenkapital’s assets are invested according to credible ESG standards, anchoring “ethical investing” in the law.
KENFO is against introducing new requirements by law to invest the assets of a reformed pay-as-you-go system.
The fund has slammed Greenpeace’s list of so-called controversial companies as “dubious”, saying that it does not hold any more bonds and equities in JBS after divesting around €2.2m this year.
Furthermore, KENFO and Greenpeace have opposing views on investments in oil and gas companies. Unlike the vast majority of institutional investors, Greenpeace believes in categorically excluding investments in oil and gas companies.
Jennifer Morgan, former Greenpeace chief executive officer, her current role as state minister in the German Foreign Office and as special representative for international climate policy, “advocates for a climate-neutral transformation, particularly in the global energy industry”, KENFO said, adding: “This is exactly the position of KENFO.”
Hardly any other pension funds have followed the steps of ABP, one of the world’s largest pension funds, after it announced the exit from fossil fuels in 2021, while the vast majority of institutional investors – including the Norwegian sovereign wealth fund – continue to invest in oil and gas companies, KENFO said.
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