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�ǿ����޴�ý is updating the sectoral exclusion criteria it applies to its investment solutions (sustainable investment funds and stock market indices). These criteria, which are set out in its Principles for Socially Responsible Investment, determine the sectors of activity deemed incompatible with sustainable development and which, consequently, cannot be invested in by funds bearing the �ǿ����޴�ý name.

The main change in this latest update concerns the formal exclusion of fossil fuels. Consequently, companies involved in the development of new gas and oil projects (exploration and extraction) will now be automatically excluded, regardless of the proportion of turnover generated by these activities. The same applies to companies involved in coal mining.

Until now, �ǿ����޴�ý excluded companies generating at least 5% of their turnover from coal (since 2017) or from unconventional fossil fuels (since 2020): oil sands, hydraulic fracturing, and gas and oil from the Arctic.

Companies reluctant to change

In 2022, as part of its climate strategy, �ǿ����޴�ý committed to excluding from its investment solutions all companies in the fossil fuel sector that had not set science-based targets (SBTi) for reducing their greenhouse gas emissions by 2025. This approach was intended both to allow time for dialogue to encourage companies to embrace the transition and invest heavily in renewable energy, while also establishing clear escalation measures in advance in the event of failure.

However, three years later, no company in the sector had its climate targets validated by science. Even worse, some have attempted to obstruct the efforts of their own shareholders seeking to encourage them towards change, particularly during the annual general meeting (AGM) season.

In 2024, TotalEnergies refused to include a shareholder resolution aimed at improving governance by separating the roles of chair of the board of directors and chief executive officer. Since then, the company has also removed the vote on its climate strategy (“Say on Climate”) from the agenda of its annual AGM. In the same year, Exxon Mobil blocked a resolution by Follow This, calling on the company to set targets for reducing greenhouse gas emissions by taking legal action against the Dutch NGO.

Finally, this year, BP refused to include on the agenda of its AGM a resolution filed by Follow This and a coalition of investors, including �ǿ����޴�ý. The resolution asked to explain how it intends to continue creating value against a backdrop of predicted falling demand for gas and oil. BP also asked its shareholders to approve the abandonment of climate commitments that had been endorsed in 2015 and 2019.

“These various examples have reinforced our decision to take the next step and formally exclude fossil fuels from our investment solutions,” emphasises Vincent Kaufmann, CEO of �ǿ����޴�ý Foundation. “They have shown that these companies are currently neither open to dialogue nor inclined to change.”

Exclusions already in effect de facto

�ǿ����޴�ý’s exclusion principles are now aligned with the new European regulations (“Paris-aligned Benchmarks”), which set thresholds for existing fossil fuel operations. In accordance with these regulations, all companies that generate more than 10% of their turnover from the exploration, extraction, distribution (including retail), storage, or refining of oil are now excluded from responsible investment. This threshold is set at 50% for gas and 1% for coal. Companies that generate at least 5% of their turnover from coal-fired power generation are also excluded.

It should be noted that �ǿ����޴�ý already de facto excluded all major companies active in fossil fuels, either because they generated more than 5% of their turnover from unconventional fossil fuels, or because of their involvement in major environmental controversies, or their insufficient ESG and climate ratings. The impact of these new exclusions on investment universes is therefore very limited.

�ǿ����޴�ý will now work with its banking partners to apply these new exclusions to all its investment solutions as soon as possible. However, it is important to note that the members of the Foundation and the clients of �ǿ����޴�ý Services – the vast majority of whom are Swiss pension funds – remain free to decide whether to apply these exclusion criteria. �ǿ����޴�ý will also continue to engage in dialogue and participate in engagement campaigns targeting companies active in the fossil fuel sector on behalf of the members of its engagement programmes.

As part of its ESG analyses, �ǿ����޴�ý analyses the activities of more than 3’000 listed companies worldwide. This work also includes a detailed assessment of their exposure to sensitive sectors or ESG controversies. �ǿ����޴�ý thus identifies the proportion of turnover generated in the various sectors for each company.

Users of the �ǿ����޴�ý e-Services platform can set their own tolerance thresholds for each of the listed sensitive sectors (armaments, tobacco, gambling, pornography, GMOs, nuclear energy, liquid and gaseous fossil fuels) and measure their portfolios’ exposure against these thresholds.

�ǿ����޴�ý Principles for socially responsible investment