A $570-billion German asset manager has sold all its shares in ExxonMobil as it has found the U.S. supermajor doesn’t have strong enough climate targets, a senior executive told the Financial Times.
Union Investment, one of Germany’s top investors with nearly $570 billion (500 billion euros) in assets under management as of September 2024, has divested its stake in Exxon, as well as in another U.S. oil and gas producer, EOG Resources, due to what the investor says are insufficient targets to reduce emissions.
The decision came as Union Investment “could not identify a sufficient commitment to the required climate targets” after engagement with the two American oil and gas producers, the asset manager’s head of sustainability, Henrik Pontzen, told FT.
“If a company fails to even set such targets, we see no basis to assume it will achieve them,” the executive added.
Exxon does not have Scope 3 targets for reducing the emissions from the use of oil and gas, although it has set Scope 1 and Scope 2 targets to cut its own emissions and emissions from its production.
Exxon says it is pursuing up to $30 billion in lower-emission investments from 2025 through 2030, with about 65% directed toward reducing the emissions of other companies. However, Exxon has conditioned these investment opportunities on “on the right policy and regulation as well as continued technology and market development.”
European asset managers continue to seek sustainability and ESG in their investments, despite a backlash against the trend in the United States.
Union Investment doesn’t face such backlash as it has “no American clients, no subsidiaries there, and is not dependent on US government contracts,” Pontzen told FT.
Earlier this year, Union Investment removed French supermajor TotalEnergies from its sustainability funds over allegations of human rights abuse at an East African oil project, Pontzen told Reuters last month.
However, Union Investment has kept its holdings in TotalEnergies because the French oil giant has Scope 3 emission targets.
By Tsvetana Paraskova for Oilprice.com
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