Europe's Largest Pension Fund Sells Off 15 Trillion Won in Fossil Fuel Company Assets

The Netherlands' public pension fund ABP, the largest pension fund in Europe, has reportedly divested approximately 10 billion euros (15 trillion won) worth of liquid assets related to fossil fuels. This move supports European authorities, who are implementing some of the most aggressive regulatory policies worldwide to achieve carbon neutrality.

Harmen van Wijnen, chairman of the ABP board, stated in an interview with Bloomberg News released on the 28th (local time) that all fossil fuel-related stocks and bonds owned by ABP, including oil, gas, and coal, were sold off by the end of the first quarter.

Chairman van Wijnen said, "ABP no longer holds liquid assets of fossil energy producers." Liquid assets refer to assets that can be easily converted into cash. ABP had previously pledged in 2021 to reduce its fossil fuel investments by 15 billion euros.

However, as of the end of March, about 4.8 billion euros worth of infrastructure investment contracts related to oil and gas remain in ABP's portfolio. Regarding this, van Wijnen explained, "Infrastructure investments are tied up in long-term contracts, so it takes longer to liquidate them," adding, "It is expected to take several years for ABP to gradually discontinue these investments."

ABP's actions are part of its response to increasingly stringent ESG (Environmental, Social, and Governance) regulations within Europe. European authorities are leading the world in creating regulatory frameworks for carbon neutrality.

Accordingly, ABP views investing in companies that fail to swiftly transition to a low-carbon economy as risky. The fossil fuel industry is a prime example.

Chairman van Wijnen emphasized, "ABP will only invest in companies that are transitioning to a sustainable economy and do not harm the climate or biodiversity."