When updating its fossil fuel policy at the end of January (1), the French pension body Établissement de Retraite Additionnelle de la Fonction Publique (ERAFP) missed an opportunity to break truly with fossil fuel expansion. While the institution is ending bond investments for most developers of new oil and gas fields, exceptions remain for some of them, notably TotalEnergies. The measures adopted also omit two major issues: liquefied natural gas and climate selection of external asset managers. Reclaim Finance welcomes ERAFP’s new commitments but calls on the institution to cease all supports for fossil fuel expansion in order to protect civil servants’ pensions from the impacts of climate change.
ERAFP is the public institution that manages the supplementary pension scheme for permanent civil servants in the state, local authorities and hospitals, as well as magistrates. At the end of 2024, ERAFP managed EUR 48 billion in assets invested in the financial markets. In 2025, Reclaim Finance revealed in a report that ERAFP and other key French pension bodies continued to support the development of fossil fuels through their investments, votes, and choice of asset managers.
A partial halt to oil and gas bond investments
ERAFP announced that it will stop investing in bonds issued by companies developing new oil and gas fields in 2026, rather than 2030 as originally planned. This is a welcome move, as it covers the vast majority of oil and gas producers and developers. However, ERAFP can still invest in companies that are harmful to the climate, as an exception is provided until 2030 for European companies whose capital expenditures aligned with the European green taxonomy represent at least 25% on average over the last three years.
In practical terms, ERAFP will be able to invest until 2030 in bonds issued by companies such as TotalEnergies (2) and Repsol, even though these financial products are one of their main sources of financing (3) and these companies are among the largest oil and gas producers in the world (4).
The geographical exception is not consistent with the IPCC scenarios and the Net Zero Emissions by 2050 (NZE) scenario of the International Energy Agency, which emphasize the global need to halt the development of new oil and gas fields in order to limit global warming to 1.5°C, the target set by ERAFP itself (5). To guarantee energy security (6), as the institution aims to do, it is urgent to end our dependence on fossil fuels, the vast majority of which are imported. To achieve this, investment in sustainable energy is necessary but cannot be based solely on Taxonomy-aligned investments: it must be directed towards sustainable activities and not granted to companies that use bonds to finance their fossil fuel activities.
Furthermore, ERAFP’s new commitments do not cover midstream oil and gas, including new liquefied natural gas export terminals, even though their expansion threatens the climate, biodiversity, and the health of local communities. Conversely, Ircantec, another French pension body, no longer invests in the developers of these terminals, and several French life insurers have also made the same commitment for their bond investments.
External asset managers with climate-wrecking practices
ERAFP delegates the management of 70% of its investments to external asset managers. Some of these managers engage in particularly dangerous practices, such as BlackRock, a staunch supporter of the fossil fuel industry, also known for its climate backtracking (7). Their practices undermine ERAFP’s climate efforts and exacerbate the systemic climate-related financial risks that threaten the global economy, portfolios, and future pensions.
However, ERAFP’s new policy does not include any criteria for selecting external managers based on their support for fossil fuels. ERAFP recently joined a coalition of institutional investors engaging their managers on climate issues (8), but still does not have a structured approach to selecting and engaging its external managers on climate issues and does not demand them to end new investments in fossil fuel expansion.
Several asset owners are already taking action. For example, Dutch pension funds PFZW and PME withdrew mandates from BlackRock for sustainability reasons at the end of 2025. More recently, Préfon, another French pension body, delisted 13 funds from its life insurance product, including a BlackRock fund, because of their insufficient sustainability practices.
The great uncertainty surrounding shareholder dialogue and voting
Despite the adoption of new restrictive measures representing progress (9), ERAFP deliberately maintains some oil and gas companies in its equity portfolio without defining a clear engagement strategy to halt their fossil fuel expansion.
ERAFP still does not have a robust voting policy for companies pursuing fossil fuel expansion, such as systematically voting against the re-election of directors and executive compensation (10). The institution therefore risks inconsistency by supporting the management of companies in which it currently refuses to invest. Nor does the institution adopt an escalation strategy with specific actions and deadlines to engage these companies.
ERAFP’s new commitments are a step in the right direction, but there is still some way to go before the institution ends all support for fossil fuel expansion. To protect current and future civil servant pensions, ERAFP must take robust measures regarding its investments, votes, and choice of external managers.
