Danish pension funds set out green investment ambitions

The green investments will most likely be a mix of private equity, infrastructure and green bonds, according to a person familiar with pension fund PKA.

PKA has contributed DKK 26.5bn, out of the DKK 350bn, as the LP is looking to approximately double its green investments, Unquote has learned. Among the LPs with larger contributions to the DKK 350bn commitment are PensionDenmark, PenSam and PFA.

A number of Danish investors have previously joined forces with the Investment Fund for Developing Countries (IFU) to launch the Danish SDG Investment fund, in a bid to meet the 17 UN Sustainable Development Goals.

The fund, which held a final close on DKK 4.85bn, invests in agribusiness, renewable energy, infrastructure, water and sanitation, as well as the services and financial sectors.

Danish investors, along with other LPs, have also teamed up to launch an alliance focusing on decarbonising the global economy and ensuring carbon-neutral investment portfolios by 2050. The Net-Zero Asset Owner Alliance, which was presented at the UN Climate Summit in New York, is set to accelerate investor actions to tackle climate change and achieve the goals of the Paris Agreement.

Among the founding members of the alliance are Alecta, Allianz, AMF Pension, Caisse des Dépôts et Consignations (CDC), Caisse de Dépôt et Placement du Québec (CDPQ), Calpers, FolkSam Group, Nordea Life and Pension, PensionDanmark, Storebrand, Swiss Re and Zurich Insurance Group.

The members are committed to transition their investment portfolios to net-zero GHG emissions by 2050. Other commitments include applying the best available scientific knowledge including the findings of Intergovernmental Panel on Climate Change (IPCC), as well as reporting on progress by establishing intermediate targets every five years.

However, one of the world's largest pension funds, ABP, keeps investing in coal and oil companies. The Dutch investor's fossil fuel investments went up from €14bn in 2015 to €16.5bn at the end of 2018, according to an analysis by Both ENDS, Fossielvrij NL and Greenpeace Netherlands.

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