There’s a growing list of institutional investors in Europe who are stripping oil and gas stocks out of their portfolios, in a move they say reduces the risk of ending up with stranded assets and financial losses.

The latest to do so is PFA, Denmark’s largest commercial pension fund with roughly USD 110bn of assets under management. The investor has just offloaded its USD 170m stake in Shell Plc based on an assessment that the company’s capital expenditure on renewables is worryingly low.

“There was a cry to them to engage more in the transition,” says Rasmus Bessing, head of ESG investing and co-chief investment officer at PFA. “But especially over the last year or so, a bit more perhaps,” Shell has been signaling it wants to “go in a different direction,” he said.

A spokesperson for Shell referred to a comment made by Chief Executive Officer Wael Sawan at the company’s annual general meeting on May 21, when he said shareholders “have strongly backed” its strategy. “Our focus on performance, discipline and simplification enables us to invest in providing the energy the world needs today, and in helping to build the low-carbon energy system of the future.”

Other institutional investors also are losing patience with oil and gas holdings. Stichting Pensioenfonds ABP, Europe’s biggest pension fund with about $550 billion of assets under management, said in May that it exited all its liquid assets in oil, gas and coal — a portfolio that was worth about USD 11bn. It has said it plans to divest a further USD 5bn of less liquid fossil-fuel assets.

In France, new sustainable investing requirements mean asset managers using the label will need to purge their portfolios of an estimated USD 7.5bn in combined fossil-fuel assets, a development that will hit companies including TotalEnergies SE and Shell.

In the UK, both the Church of England Pensions Board and the Church Commissioners for England, which together oversee about USD 17bn in assets, said last year that they’ll start blacklisting oil and gas majors.

Sweden’s AP7 fund, which manages more than USD 100bn, has exclusion policies targeting a range of oil producers, including Saudi Aramco and India’s Oil and Natural Gas Corp. It blacklisted Exxon Mobil Corp.

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