Danish pension group PKA locked 35 oil companies out of its investment portfolio for inadequate climate policies and will now turn its focus on the automotive sector.

PKA – which has €36bn ($44.4bn) under management and was an early backer of the offshore wind sector – said it decided 35 of 62 oil companies it analysed “do not take the necessary initiatives to comply with the goals of the Paris agreement”.

The excluded companies include Chinese giant Sinopec, Russian duo Lukoil and Gazprom, and Occidental Petroleum of the US.

Another 15 remain on a ‘watchlist’ as PKA tries to nudge them in a more climate-friendly direction, with only 12 cleared completely to remain investment targets.

Corporations are facing growing pressure from investors over their exposure to fossil fuels and their ability to reshape for the energy transition.

PKA argued that projections of downwards demand for oil in the face of global climate policies makes an over-reliance on fossil fuels bad for business as well as the planet.

CEO Peter Damgaard Jensen said the analysis was undertaken to see if the companies “have the right management focus on the Paris agreement in their investments and in their expectations of future earnings on oil. If they do not, they are not interesting investments”.

PKA has already cut a swathe of coal-focused companies from its investment list in response to the call for corporate action that followed the Paris Agreement, which emerged from the 2015 COP 21 climate summit and seeks to limit temperature rises to a maximum of two degrees.

Now the pension group said it will apply similar scrutiny to the auto industry.

Damgaard Jensen said: “An effective conversion of the transport sector is crucial for meeting the Paris agreement. And automakers who do not invest in the development of electric and hybrid cars will pose a financial risk, as electric cars will be more attractive to consumers in line with technological developments in the long run.”

PKA has been a regular investor in the offshore wind sector since 2011, most recently when it took a 25% stake in the 659MW Walney Extension developed by Orsted off northwest England.