AkademikerPension, which is based north of Copenhagen, says it will dump more than USD 300m in fossil-fuel bonds through December. Issuers affected by the decision include Occidental Petroleum Corp., Gazprom PJSC and Petroleos Mexicanos, the USD 23 bn fund said in an email on Thursday.

“We can see a tendency that fossil fuel bonds, like fossil fuel shares, start to price in stranded asset risks even in the last year with strong performing energy assets,” Anders Schelde, the chief investment officer of AkademikerPension, said in a statement.

“We believe this may be the start of new headwinds for these bonds for the years to come.”

The decision coincides with a wave of market turbulence triggered by a more hawkish Federal Reserve that’s forcing investment managers everywhere to adapt to higher interest rates. It also comes amid an energy crisis that’s driven up oil and gas prices. At the same time, anxiety over the pace of climate change has drawn pledges from across the financial industry to slash financed emissions.

Many fund managers are responding by using so-called engagement strategies, whereby they hold on to high emitters and try to use their influence to force companies to adopt cleaner business models. But others, like AkademikerPension, are increasingly opting for exclusion strategies to protect their portfolios.

In October last year, DivestInvest said asset managers overseeing almost USD 40trn in total had committed to offloading fossil fuel holdings. Among them is ABP, Europe’s biggest pension fund, which has said it will dump EUR 15bn worth of fossil fuel assets by early 2023.

Janne Gleerup, chair of AkademikerPension, said the planned divestment of oil and gas bonds is “something we have wanted for a long time.”

“But it has been difficult and we have had to take many factors into consideration,” she said. “Not least the potential impact to future investment returns.”

AkademikerPension divested its fossil-fuel stocks in 2019, including those seen as prime transition assets, such as Equinor ASA. In total, it sold oil and gas stocks worth about USD 130m.

The fund flagged its intention to offload fossil-fuel bonds in 2020.