Allocators

AP7 Divests From Alleged Paris Accord Violators

Stockholm (NordSIP) – AP7, the largest pension fund in Sweden providing pensions to 3.5 million Swedish citizens, announced last week it is divesting itself from six large companies it claims have violated the Paris Climate Accord.

The following companies have been completely excluded due to acting in breach of the Paris Accord:

  • Entergy (for counteracting climate legislation in the United States)
  • Exxon (for counteracting climate legislation in the United States)
  • Gazprom (for counteracting climate targets through the extraction of Arctic oil in Russia)
  • Southern Corp. (for opposing climate legislation in the United States)
  • TransCanada Corp. (for counteracting climate targets via large-scale oil pipeline construction in the U.S. and Canada)
  • Westar Inc. (for counteracting climate legislation in the United States)

AP7 blacklists companies that do not live up to the minimal level of respect for human rights, the environment and anti-corruption, according to its website. AP7 also does not invest in companies involved in the development and production of nuclear weapons. The Paris Accord to the UN Climate Convention is a standard taken into account in the fund’s analysis since the fund’s last screening in December of 2016. As a result, it has excluded 67 companies from the fund’s investment universe as of June 15, 2017.

The AP7 blacklist is revised biannually in June and December. Fourteen companies were also blacklisted as a consequence of the last standardized review performed in the last six months: Enbridge, Marathon Petroleum, Phillips 66, Huntington Ingalls Industries, BHP Billiton, JBS, Toshiba, Fortive Corp., Exxon, TransCanada, Gazprom, Etergy Corp., Southern Corp., and Westar Inc. By contrast, two companies: Brookfield Asset Management and Wesfarmers, have been removed from the blacklist and have been reapproved for investment.

However, CleanTechnica’s Joshua Hill reports there has been some dissent from named companies, including ExxonMobil, who emailed a statement to news outlets saying it respectfully disagrees with the decision, claiming AP7 “has not communicated to us its evaluation process. We have been vocal in our support of the Paris climate agreement, which we believe is an effective global framework for mitigating the risk of climate change.” ExxonMobil steadfastly proclaimed its support of the Paris Climate Accord under Rex Tillerson, who has reiterated his support as U.S. Secretary of State despite U.S. President Donald Trump ultimately withdrawing the U.S. from the treaty.

“Sweden divesting its largest pension from Exxon proves you can’t claim to support climate action while funding and perpetuating climate change,” however, said Jamie Henn, Strategic Communications Director for global grassroots climate movement 350.org. “Exxon knew about climate change half a century ago, and continues to sow doubt and bankroll climate deniers. With its core business model dependent on exploiting people and planet for profit, Exxon is in direct violation of the Paris agreement.”

Entergy, the U.S. energy company, also expressed disappointment in AP7’s decision to divest, suggesting it is “unfortunate in light of the fact that the rationale for the decision seems to be unfounded” in a statement. “Entergy has aggressively advocated for smart carbon policies for more than a decade. In 2016, our CO2 emissions were approximately below our year 2000 emissions.”

Kames Capital
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