PME's sustainability ambitions assessed and tightened
PME is very ambitious when it comes to sustainability and combating climate change. That is why, in 2018, we decided to exclude all coal producers from our investment portfolio. In 2021 we took this one step further and announced the sale of all our investments in fossil oil and gas companies. Years of engagement talks with the fossil sector had proved to be too unproductive. They neither accelerated nor strengthened the energy transition that is so badly needed to achieve the Paris climate targets. PME has reinvested the funds this freed up, totalling some 1.2 billion euros, in sustainable energy.
In the past few months, research platform Pointer conducted research into fossil money flows in the Netherlands. They also looked at pension funds such as PME. Pointer's conclusion regarding PME is that its investment policy is stricter and more ambitious than that of many other funds. But also that we stated perhaps a bit too hastily that we have already excluded all oil and gas producers. This was not entirely true yet.
Why is this?
To exclude companies from an investment portfolio, PME has to apply a sector definition. This definition determines how a company is classified. To date, PME has used standards that are common in the financial sector and the investment world, such as Bloomberg, MSCI and Sustainalytics. Coal producers, for example, are defined as companies that derive more than half of their turnover from coal. By using this definition, some companies slipped through the cracks, and we continue to invest in them even though we don't want to. To prevent this in future, PME will also use public data from now on, including the Urgewald list. Our use of Urgewald as a source has also disclosed some smaller fossil oil and gas producers in our portfolio. These, too, will be excluded.
What else will PME do?
Our response to Pointer's findings: this should not have happened and we are disappointed it did. We appreciate Pointer having alerted us to this and will take immediate action. All producers of coal, oil and gas that come to light, no matter how small the turnover from their production, will be excluded as soon as possible. This means, for instance, that we will be saying goodbye to Glencore, BHP Billiton and Hindalco.
We have also decided to use public lists, including the list of the NGO Urgewald, as a supplementary source of information from now on. This will give us a more complete picture of the companies in our investment portfolio. And it will take us one step closer to our goal of having a sustainable investment portfolio. Read the Pointer article. Or watch the broadcast.