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Denmark's MP Pension to divest shares in 10 leading oil majors

Highlights

Divestment move to affect $95 million in stock

To assess holdings in 1,000 oil companies

London — MP Pension, a Danish fund which manages about $17 billion, is selling its holdings in the world's ten biggest listed oil companies on the grounds their business models are currently incompatible with the Paris climate goals.

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Under the move, the pension fund will sell off its shares in ExxonMobil, BP, Chevron, PetroChina, Rosneft, Royal Dutch Shell, Sinopec, Total, Petrobras, and Equinor which total some DKr644 million ($94.5 million) in value, the fund said Tuesday.

It said the divestment move covers two thirds of its oil investments of its total oil sector investment, adding that it plans to assess holdings in over 1,000 oil companies by the end of 2020.

"MP wants to contribute to the green transition," MP Pension investment manager Anders Schelde said in a statement. "We do not believe that this sector can deliver a return on par with the rest of the market in the coming years. Demand for oil will decrease as the green transition accelerates."

Despite European oil majors BP, Shell, Total and Equinor looking at future climate scenarios and showing signs of a transition to lower carbon energy, the fund said none of the 10 oil majors yet has a business model compatible with the Paris Agreement.

"We would rather draw a line in the sand now that we do not believe in this context that we can influence the companies further by the end of 2020," Schelde said.

Thousands of managed funds globally have been dropping fossil fuel investments in recent years as global concerns over climate change gain pace.

More than 1,000 institutions with managed investments worth over $8 trillion have now committed to divest from some or all fossil fuels, according to estimates by US-based environmental group 350.org.

In June, Norway's parliament gave the go-ahead for the country's $1 trillion sovereign wealth fund to divest its holdings in over 100 oil producers and more coal companies under a strategy to cut its exposure to fossil fuels.

The move, approved by the Norwegian government in March, affects Norway's $8 billion worth of holdings in exploration and production companies, the biggest of which are EOG Resources, followed by India's Reliance Industries and US independent Occidental Petroleum.

-- Robert Perkins, robert.perkins@spglobal.com

-- Edited by Debiprasad Nayak, debiprasad.nayak@spglobal.com