ERAFP updates its fossil fuel policy

Paris, January 28, 2026 – At its meeting on December 16, 2025, the Board of Directors of the *Établissement de Retraite Additionnelle de la Fonction Publique* (ERAFP) adopted an update to its investment policy regarding fossil fuels. These changes, which will take effect in 2026, tighten eligibility criteria for assets linked to unconventional and conventional hydrocarbons, thereby reinforcing ERAFP’s commitment to a just energy transition aimed at aligning with a 1.5°C trajectory.

During the review of the fossil fuel policy adopted in September 2023, the ERAFP Board of Directors recognized the extent to which the original context had shifted. First, recent IEA analysis indicates that staying on the 1.5°C pathway is now at risk. Second, energy security has emerged as a critical issue in Europe, characterized by heavy reliance amidst heightened geopolitical tensions.

To address this new reality, ERAFP deemed it necessary to step up its divestment from hydrocarbons while establishing specific, time-bound criteria to distinguish European companies that are furthest ahead in the energy transition and play a key role in energy security.

These decisions will enable ERAFP to continue its shareholder engagement efforts with the companies concerned.

The changes to the fossil fuel policy approved by the Board confirm that protecting the Scheme from climate change and contributing to climate mitigation are top priorities for ERAFP, fully aligning with the fulfillment of its fiduciary duty to contributing beneficiaries. While the development of low-carbon energy—supported by ERAFP under the climate policy update scheduled for spring 2025—remains the primary long-term driver of energy independence, these changes also reflect a concept of responsibility that factors in strategic autonomy in the interest of sovereignty.

The following measures have thus been decided:

• A halt to debt financing for hydrocarbon-producing companies developing new oil and gas exploration or production projects (conventional or unconventional) starting in 2026, compared to the previous target of 2030.
• Stricter eligibility thresholds for equity investments (both flows and existing holdings) in companies active in unconventional hydrocarbons. Companies deriving more than 15% of their revenue from this sector will no longer be eligible, down from the previous 30% threshold.
• These two measures do not apply until 2030 to companies headquartered in Europe whose capital expenditure (CAPEX) aligned with the EU Green Taxonomy accounts for at least 25% of the total, averaged over the last three years.

• Furthermore, ERAFP will make its best efforts not to increase the Scheme’s total relative exposure to the shares of hydrocarbon-producing companies, bearing in mind that ERAFP’s responsible investment framework already leads to the exclusion of companies that are turning away from the energy transition.

   

Implementation of this policy will continue to be monitored by ERAFP’s Investment Policy Monitoring Committee (CSPP). ERAFP will also continue to report on changes in its exposure to fossil fuels and the results of its engagement activities in its sustainability report.

The adopted amendments will take effect during 2026, as part of the dialogue with asset managers. The other measures of the fossil fuel policy adopted in 2023 remain in place—most notably the reduction of the thermal coal revenue threshold to 1% (down from the previous 5%), with an exception for companies aligned with a 1.5°C trajectory certified by the SBTi.

ERAFP’s fossil fuel policy and climate policy constitute the two pillars of its energy-related investment strategy. Together, they form a coherent framework for responsible, climate-aligned investment, fostering both portfolio decarbonization and investment in transition energy sources.