Germany’s nuclear waste management fund KENFO has underweighted its investments in oil and gas companies, refraining from an immediate exit to pressure companies to transform their business models.

Investments in equities and bonds in oil, gas and coal companies amounted at end of last year to around 3% of KENFO’s €24bn in assets, compared with around 6% in the major global stock and bond market indices, the sovereign wealth fund said in a statement.

KENFO is “significantly underweight” in those sectors due to its sustainable investment approach, it added.

It will not provide new financing for infrastructure assets in the oil and gas sector that are not in line with Net Zero Asset Owner Alliance (NZAOA) targets.

KENFO’s statement follows research by the environmental organisation Urgewald, which showed that the fund invests €771m in bonds and equities of fossil fuel companies, including TotalEnergies (€81m), Shell (€55m), and BP (€45m).

Urgewald and Fossil Free Berlin, another environmental group, have called on KENFO to immediately give up fossil fuel investments, divesting from companies that, according to the Global Oil & Gas Exit List (GOGEL), plan to develop new oil and gas fields or build new pipelines, LNG terminals or gas-fired power plants.

KENFO is convinced that a “sustainable and responsible support” of the transformation processes through investments “is not synonymous with an immediate and complete exit” from financing fossil fuels and commodity companies on the capital market, the fund said.

Excluding certain sectors would not reduce global CO2 emissions, it added.

Moreover, the immediate exit from fossil fuel investments demanded by Urgewald is unrealistic to implement, because there aren’t enough renewable energy and pipeline networks available yet, putting energy supply massively in danger, and leading to a significant energy price increase, it added.

KENFO explained that it has to balance returns and sustainability goals when making investments to fulfill its mandate, and finance the costs of disposing radioactive waste,. For this reason the energy and commodity sectors are part of its investment portfolio, albeit to a lesser extent, it said.

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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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