Dutch pension giant ABP responds over nuclear safety at France’s Engie

Cracks appear at reactors near giant fund’s Heerlen HQ

Dutch civil service pension fund Stichting Pensioenfonds ABP has acknowledged people’s fears over nuclear safety at French energy utility Engie after cracks were found in two of the company’s nuclear power plants in Belgium, just across the border from its head office.

The damage has been discovered at the Tihange and Doel plants and a ‘human chain’ protest is being planned this weekend linking Tihange with Liège (Belgium), Maastricht (Netherlands) and Aachen (Germany) calling for the immediate closure of the plants.

The plants, whose reactors are almost 35 years old, have had issues with security breaches in the past and €388bn ABP says it has held discussions with Engie about this.

ABP, based in Heerlen near Maastricht in the south of the country, says it understands that people are concerned about nuclear power plants in their area and that it uses its role as a shareholder to continue to emphasize the importance of security at nuclear power stations with Engie’s management.

The influential fund cites the International Energy Agency as saying nuclear energy is needed for the transition to renewable energy generation and that it does not emit CO2. “But we are aware of risks in terms of safety, dismantling costs and storage of waste,” it says – adding that its main focus is on investments in renewable energy.

It comes as the €10.4bn local government pension fund for the civil servants of North Rhine-Westphalia in Germany announced it would divest from ENGIE and fellow energy producer. IPE cited the regional finance ministry as saying ENGIE corporate bonds had been sold.
Last month ABP said it was “on course” to meet concrete objectives to combat climate change.In 2016, ABP reduced the level of CO2 emissions in its equity portfolio by 7m tonnes (equivalent to the annual emissions of 2.8m cars). Investments in renewable energy rose by 25%; and in 2016, the company achieved a total return of 9.5%.

ABP aims to reduce the carbon footprint of its equity portfolio by 25%; by the end of 2016, a reduction of 16% had been realized, due in part to the use of carbon budgets and its exit from the fossil fuel units of RWE and E.ON. The fund is targeting €5bn invested in renewable energy by 2020. As at the end of last year, these had grown to €2.8bn, with investments in Indian and US solar and wind in the Netherlands. 

Engie, the former GDG Suez, runs seven reactors in Belgium through Electrabel. Although it has €16bn investments in renewables and energy efficiency – for example in April this year it took full control of French wind pioneer La Compagnie du Vent – it says on its website that it aims to be a “player in the worldwide nuclear revival”.

Engie, which has been probed by the European Commission over its tax affairs, has released several green bonds – though they were subsequently removed from the MSCI/Barclays green bond index after methodological changes.

In other news, a group of institutional investors, including Legal & General Investment Management, AP7, FRR, PKA and PGGM – along with the Principles for Responsible Investment – have worked with Carbon Tracker on a new report called 2 degrees of separation: Transition risk for oil & gas in a low carbon world. It finds that five of the world’s six largest listed oil companies risk wasting more than 30% of possible spending on upstream projects that are high-cost and surplus to supply needs in a 2⁰C world, with Exxon Mobil most exposed.