PGGM to step down as Climate Action 100+ Shell co-lead

The move follows PFZW's divestment of the oil major, along with 309 other Paris non-aligned oil and gas companies.

Dutch investor PGGM will step down from its role as a lead engager on Shell as part of investor group Climate Action 100+, after its client PFZW decided to divest 310 oil and gas companies, including the UK-based giant.

PFZW, the €240 billion healthcare pension fund, announced on Thursday that, after completing a two-year engagement programme with the oil and gas sector, only seven of its holdings had “compelling” climate transition strategies and can “remain part of the portfolio”. 

The companies retained are Cosan, Galp Energia, Grannul Invest, Neste Oyj, OMV, Raízen and Worley. 

PGGM took over CA100+ engagement duties on Shell along with MN in May 2022. The Dutch duo replaced the Church of England Pension Board (CEPB), Robeco and the Universities Superannuation Scheme. 

In June, the CEPB divested Shell along with other oil and gas companies it said were not showing “sufficient ambition to decarbonise in line with the aims of the Paris Agreement”. 

Colin Tissen, adviser responsible investment at PGGM, told Responsible Investor that the fund remains committed to CA100+ and is involved in supporting groups for multiple target companies. 

“We’ll keep our eyes open in case there are vacancies for lead positions at companies that fit our engagement programmes,” he said. 

When asked whether PGGM has been replaced by another investor, a CA100+ spokesperson told RI that Shell has three lead investors, excluding PGGM. Only MN has publicly disclosed that it is among them.

In addition to Shell, PFZW’s divestment, which amounts to €2.8 billion in assets, includes other major players such as BP and TotalEnergies.  

“The intensive shareholder dialogue over the past two years with the oil and gas sector on climate has made it clear to us that most fossil fuel companies are not prepared to adapt their business models to Paris,” Joanne Kellermann, chair of the PFZW board, said of the decision.

Kellermann expressed her disappointment that only seven companies remain investible for PFZW.  

“While the largest companies in this sector do invest in sustainable forms of energy, the switch from fossil to low carbon is not nearly fast enough,” she said. 

PFZW will now turn its attention to the demand side, such as “power companies and producers of materials with a high carbon footprint”. The fund will ask these companies to “develop ambitious transition strategies to contribute to the goals of the Paris Climate Agreement”, it said.