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What to do with fossil fuel investments: divest vs shareholders’ pressure

What to do with fossil fuel investments: divest vs shareholders’ pressure


Debate on ABP pension fund

MAASTRICHT. In what should the university’s pension fund ABP invest its – or better said, the pensioners’ – money? Fossil Free Maastricht wants them to stop investing (divest) in fossil fuel companies as soon as possible. ABP’s policy is to stay engaged with the companies to put pressure on them to make changes. The way forward was discussed at the debate Pension vs Planet, Monday night in a packed Aula on the Minderbroedersberg, organized by Sustainable UM2030.

“We have the same goal, but we see a different route to It,” says Corien Wortmann-Kool, chair of the board of ABP, repeatedly throughout the debate. ABP thinks their power lies in engagement: voting at shareholder meetings, setting up improvement processes to encourage sustainable behaviour. “We expect change from those companies that do not meet the requirements,” says Wortmann-Kool. “They will have to show progress, or they won’t be part of our portfolio any longer.”

It’s ABP’s aim to reduce the CO2 emission of their portfolio by 40 per cent in 2025. By 2030 they don’t want to invest directly in coal for energy without CO2 compensation in the 36 OECD countries anymore. They also want to invest more in sustainable and innovative companies. In line with the Paris agreement, the world economy should be climate neutral in 2050 and therefore also the pension fund’s portfolio.

Too little, too late – say multiple members of the audience. Their scepticism is voiced by Sarah Thin, member of Fossil Free Maastricht and PhD candidate at the law faculty. “There is very little proof that engagement works. Take Shell, they have done nothing in the past twenty years, why would we trust them now? Shareholder pressure only works when you have leverage; when you’re willing to divest. How much time will you give them?” As for voting at shareholder meetings, Thin has another question: “Why did ABP vote against or abstain from voting on four occasions where sustainable resolutions were proposed?” Wortmann-Kool responds that they look at what to do case by case.

Martin Paul, President of Maastricht University, says that as a person he agrees with Thin. “I would encourage divestment in a sensible way, as fast as possible. But as an employer, I’m also responsible for 4,500 pensions. I want them to be safe.” He also reminds the audience that Maastricht University is not in a position to withdraw from the ABP pension fund. “It’s mandatory for all universities.”

Divesting in a fast and sensible way is possible, says Thin. “There are examples of institutions of a similar size that have done it in about two years.” She has another argument for divesting: “It’s well documented that Shell and other fossil companies have violated human rights on multiple occasions.” Wortmann-Kool didn’t really go into that during the debate, but the ABP policy also says they don’t want any companies who don’t demonstrably respect human rights in their portfolio by 2050.

Both Wortmann-Kool and Paul struggle with the question what their pensioners and employees want. “I am not the university. I want to discuss this with the community,” says Paul. Wortmann-Kool says they have regular surveys, but their response rate is too low to derive real conclusions from it. However, when asked if ABP would divest if 51 per cent of their ‘verantwoordingsorgaan’ (accountability body, a council of representatives of the members) would think it a good idea, she wouldn’t make any further promises than that they would take that “very seriously.”

Paul promised the audience that this is not the end of the discussion. Together with Fossil Free, the UM will look at what the next steps are. “I would like to take this discussion to the VSNU, the Dutch association of universities. And perhaps we can look into asking all employees what they want, not just me, not just the people who are here today.”



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