AP7 blacklists two oil firms over Paris Agreement breaches
Swedish pension fund AP7 has excluded the firms from its investment portfolio, citing their failure to align with the Paris Agreement.
The Swedish fund, which manages assets worth $99.8bn, has blacklisted EOG Resources and MEG Energy Corp due to their "large-scale operations without transition plans".
AP7 excludes companies that breach the UN Global Compact's ten principles or the Paris Agreement. It also blacklists firms involved in the development or production of nuclear weapons.
The fund said its decision to exclude the US energy company EOG Resources was based on its oil operations, while Canadian firm MEG Energy Corp was blacklisted due to its oil sands operations. Both companies were deemed to be in violation of the Paris Agreement for failing to develop climate transition plans.
Charlotta Dawidowski Sydstrand, head of environmental, social and governance (ESG) at AP7, emphasised that blacklisting does not mean the pension fund halts engagement with the companies in question.
Speaking to Net Zero Investor, she said: "Blacklisting is one of the tools in our active ownership strategy, but it does not mean an end to dialogue with the companies in question. AP7 blacklists companies that fail to comply with international norms related to human rights, labour rights, and environmental sustainability.
Dawidowski Sydstrand explained that since 2016, the Paris Agreement has served as one of the “key norms” that AP7 applies.
“Companies involved in large-scale coal and oil production that do not meet our minimum standards for alignment with the Paris Agreement’s goals are subject to blacklisting.
“Nonetheless, AP7 continues to engage with the companies it has blacklisted to encourage improvement,” she added.
The blacklist, Dawidowski Sydstrand explained, is part of a AP7’s broader engagement, which includes dialogue with companies and voting at general meetings.
In total, AP7 has excluded 110 companies. Of these, 53 are fossil fuel companies, which have been excluded based on Paris Agreement violations. While another ten oil and coal companies are blacklisted under other criteria.
The fund confirmed that its blacklist review will be expanded in 2025 to assess more oil companies.
Separately, AP7 announced this month that it has removed Japanese industrial and engineering company Hitachi Zosen Corp from its blacklist, citing "a lack of verified information about ongoing violations by the company".
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