Denmark’s private pension fund industry is banding together in a pledge to invest more than 350 billion Danish kroner ($51.7 billion) in green assets by 2030. The goal is to help reduce the country’s carbon dioxide emissions by 70%.
The investments will be in energy infrastructure and other green activities such as green shares, green bonds, and investments in energy efficient construction.
According to Insurance & Pension Denmark (IPD), the country’s pension trade association, the Danish pension industry has already invested 126 billion kroner in green assets, and an additional 35 billion kroner has already been planned.
At the UN Climate Action Summit in New York this week, the Danish pension industry was represented by the pension companies PensionDanmark, PKA, PFA and Pensam. On behalf of the government, Danish Prime Minister Mette Frederiksen was there, along with the country’s climate minister and development minister.
“In Denmark we can do something very special when we set ambitious political goals and collaborate across the public and private sectors,” Frederiksen said at a Climate Summit press conference. “Now we must work to get the international investors involved. It is crucial to achieve the green transition globally.”
Danish pension funds have been among the most progressive institutional investors in terms of implementing ESG priorities into their investment strategies. In July, Denmark’s AP Pension launched a new line of sustainable investment products. 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).
In June, Denmark’s $16.8 billion Magistre & Psykologer (MP) Pension decided to exclude Brazilian mining company Vale in its investments because it said the company’s activities violate the pension’s policy for responsible investment. The divestment came after the collapse of a Vale-owned dam in Brazil killed more than 200 people and created what is considered the biggest environmental disaster ever in Brazil’s history.
Torben Möger Pedersen, CEO of PensionDanmark, who also attended the Summit, said in a statement that the green deal will make Denmark an “absolute world leader” in a transition to a green economy.
“A joined Danish pension industry and the Danish government sends a clear signal,” he said, “that the ambitious Danish objectives – not only for Denmark but on behalf of the climate of the entire planet – are highly substantial and backed by the necessary capital.”