Contends against accusations of advancing fossil fuel projects
In the realm of climate-conscious investing, a heated debate has emerged between KENFO, a German public law foundation managing assets for nuclear waste disposal, and environmental campaign group Urgewald. The dispute revolves around KENFO's investments in energy firms that are expanding their production of fossil fuels.
Urgewald, in its 2025 analysis, has accused KENFO of investing tens of millions of euros in major oil companies with ongoing fossil fuel expansion plans, such as Shell, TotalEnergies, and BP. The environmental campaign group argues that KENFO's focus on portfolio carbon intensity metrics overlooks actual fossil fuel expansion activities by invested companies.
Urgewald's Kathrin Petz claims that this approach makes it easy for KENFO to continue supporting companies that undermine climate goals by expanding fossil fuel production. The campaigners are urging KENFO to divest from such companies entirely, especially given that fossil fuel expansion is increasingly seen as incompatible with climate-conscious investment by public actors.
In response, KENFO maintains that its management emphasises carbon intensity reduction and that its investments are aligned with its sustainability commitments. However, Urgewald’s updated reports note that KENFO’s fossil fuel investments have slightly increased, and challenge the sufficiency of carbon-intensity metrics by pointing to the large-scale fossil expansion plans of portfolio companies.
The ongoing dialogue reflects tensions between investment approaches in public climate-related funds. Urgewald argues that while KENFO claims to be reducing carbon intensity, its approach fails to prevent funding of companies expanding fossil fuel production, calling for a more stringent divestment policy.
It's important to note that KENFO's mission is to cover the cost of nuclear waste disposal in Germany, with no suitable final repository site yet identified. The foundation's investments in the fossil fuel industry increased by 3.4% or €791m between 2023 and 2024.
The SBTi, the global body driving the transition to a net-zero world, has set guidelines for financial institutions with exposure to the fossil fuel industry. These guidelines include ceasing all new financing of coal projects and phasing out financing of new oil and gas projects by 2030. Institutions are expected to immediately halt the expansion of existing fossil fuel assets under these guidelines.
KENFO argues that a complete divestment from fossil fuel sectors would have minimal real-world impact, as other investors would buy the assets. However, this argument is met with scepticism by those advocating for stricter divestment policies, who argue that such a move could send a powerful signal and help push the industry towards a more sustainable future.
The dispute over KENFO’s fossil fuel assets highlights the increasing pressure asset owners with net zero commitments face. As the debate continues, it remains to be seen how KENFO will navigate this challenging landscape while fulfilling its mission to cover the cost of nuclear waste disposal in Germany.
References: 1. Net Zero Investor 2. Urgewald Press Releases 3. Urgewald Media
- KENFO's investments in fossil fuel expansion projects, as highlighted by Urgewald, raise concerns in the realm of environmental science, particularly when considering the negative impacts of climate-change on our environment.
- The SBTi, a global body driving the transition to a net-zero world, has set guidelines for financial institutions, including phasing out financing of new oil and gas projects by 2030 and immediate halting of the expansion of existing fossil fuel assets.
- While KENFO contends that complete divestment from fossil fuel sectors would have minimal impact, the environmental campaign group Urgewald, along with other advocates for stricter divestment policies, argue that such a move could send a powerful signal and catalyze the energy industry's transition towards sustainability.
