Denmark’s AP Pension has launched a new line of sustainable investment products, AP Sustainable, that was developed with Danish fintech company Matter. All of the investments in the line will work toward supporting the goals of the Paris Agreement or contribute to one or more of the United Nation’s 17 sustainable development goals (SDGs).
“Together with AP Pension, we look forward to setting new standards for sustainability in the Danish pension industry,” Niels Fibæk-Jensens, CEO and co-founder of Matter, said in a statement, “both by lifting the bar for sustainability and accountability, and by giving our customers the opportunity to follow their sustainable portfolio in new ways.”
The new sustainable investment approach includes sustainable stocks and green bonds, as well as direct investments in renewable energy, sustainable forestry, and real estate. It will also exclude investments in fossil fuels, weapons, and tobacco.
The equity portfolio is managed by Danish portfolio manager BankInvest and consists of 150 to 200 stocks selected among a universe of securities in which at least 20% of the companies’ revenues are connected to one or more of the UN SDGs. At the same time, the portfolio must have 50% less CO2 emission than a comparable index.
The bonds in the line are selected only among “green bonds” that finance green projects contributing to climate change actions and the “green transition,” according to Matter. The bonds will have a low credit risk, such as state bonds and mortgage bonds.
The firm also said three types of alternative investments are included: renewable energy, which will have a 60% weighting, Danish real estate, which will have a 30% weighting, and forestry, which will have a 10% weighting.
The investments in renewable energy involve off- and onshore wind farms, and solar power, while the investments in Danish real estate are managed by AP Ejendomme real estate and are only invested in construction with a sustainable certification, and sustainable improvements on existing buildings such as energy efficiency enhancements.
Meanwhile, the investments in forestry require already holding a certificate, or being in the process of certification by the Forest Stewardship Council (FSC) or the Program for the Endorsement of Forest Certification (PEFC).
AP Pension said it believes new employees in AP Pension will automatically invest 25% of their pension in the sustainable product line.
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