Sustainability is firmly rooted in the Danish pension fund's DNA, according to PensionDanmark. As an asset owner, it believes it must act responsibly and push its investments in a direction of positive impact.
In line with this thesis, PensionDanmark established an internal impact fund in March 2020, which focuses on the just transition to mitigate climate change, lowering pollution, securing water supply and bring healthcare solutions to more people and communities. An external fund with similar focus was also acquired at Baillie Gifford to optimise impact.
During the Covid-19 crisis, these two funds have outperformed the market index, according to PensionDanmark.
The fund's green infrastructure investments have also resulted in power production based on coal and other fossil sources being replaced by renewable energy in countries around the world.
In 2019, PensionDanmark committed to carbon neutrality in its investment portfolios by 2050 and, in 2020, the pension fund expanded its CO2 calculations to include its corporate bond, private equity and real estate portfolios.
"We use both environmental, social and governance (ESG) and United Nations Sustainable Development Goals (SDG) indicators for the purposes of measuring and disclosing whether we are moving in a sustainable direction. In 2020, we set targets for the period to 2025 and included additional environmental data in our list of ESG ratios. Our work is rooted in our national and international partnerships and has required us to develop new calculation methods. By focusing on measuring our impact – negative as well as positive – and by disclosing our targets, we are raising the bar for our corporate social responsibility efforts. You get what you measure, " says Torben Möger Pedersen, CEO of PensionDanmark.
In order to strengthen credibility, transparency and reliability of ESG reporting, PensionDanmark also became the first Danish pension provider to have its ESG information included in its independent auditor's report.
PensionDanmark says its responsible investment efforts are governed by the principles of the OECD's Responsible Business Conduct for institutional investors, international conventions and norms, recommendations of the UN Global Compact, of which PensionDanmark is a member, the United Nations Sustainable Development Goals (SDGs) and the Paris Agreement. PensionDanmark is also a co-founder of Net-Zero Asset Owner Alliance – a global investor alliance ensuring carbon neutral investment portfolios in 2050.
One judge praised the pension fund for its "great holistic movements and constant evolution" while another labelled it a "cost-effective and responsible" asset owner.
