Germany’s Union Investment divests from ExxonMobil

One of Germany’s largest asset management companies, Union Investment, has divested from ExxonMobil and EOG Resources over the oil companies’ lack of climate strategy.

Union Investment, a Frankfurt-based asset manager with 500 billion euros under management, has sold its holdings in the two U.S. oil companies.

The sale comes less than a month after the Swiss National Bank, one of the largest global investors in equities, sold its entire stake in U.S. oil giant Chevron citing environmental concerns.

“As part of our climate strategy, we require all companies to commit to long-term, comprehensive climate targets,” Henrik Pontzen, Union Investment’s head of sustainability, told the FT. “If a company fails to even set such targets, we see no basis to assume it will achieve them.”

ExxonMobil aims to achieve net zero emissions for Scope 1 and 2 by 2050, which cover direct emissions from operations along with purchased energy.

Critics have argued that not only is that timeline too late, but ExxonMobil and others in the oil industry are ignoring Scope 3 emissions – the emissions from burning the oil and gas they extract. Scope 3 emissions account for 90 percent of the total.

Without limits on Scope 3 emissions, there are no meaningful barriers standing in the way of ExxonMobil increasing its climate pollution.

ExxonMobil has plans to grow production indefinitely, with a goal of ramping up output to 5.4 million barrels per day by 2030. To get there, the company says it will spend $27 billion to $29 billion this year, and will maintain capex levels at $28 billion to $33 billion per year between 2026 and 2030.

An ExxonMobil spokesperson defended the company’s position in a statement to the FT, arguing that a Scope 3 emissions limit “ignores growing energy demand.”

Union said it “could not identify a sufficient commitment to the required climate targets.”

The German firm maintained its holdings in TotalEnergies and Shell, stating that those oil majors have “met the minimum requirements” of a credible strategy, as the FT reported.

Meanwhile, EOG Resources, a large U.S. shale producer, announced on May 30th that it would acquire Encino Acquisition Partners for $5.6 billion, a move aimed at expanding its footprint in the Utica shale in Ohio. It also produces oil and gas in Texas, Oklahoma, Colorado, Wyoming, and North Dakota.

The company expects to produce about 1.1 million barrels of oil equivalent per day this year, the fifth straight year of production increases.

(Writing by Nick Cunningham; editing by Sophie Davies)