For each DKK 1 pension crown (EUR 0.13) invested in oil, coal and gas companies around the world, DKK 5 (EUR 0.67) are invested in green, renewable energy sources like wind, solar and biofuels. This development has been significant in recent years. In 2014, there were only three times as many green investments compared to investments in fossil fuels, a new survey from Insurance & Pension Denmark shows.

"We are very pleased to see that Danish pension funds are investing five times more in green energy than in black energy. Especially considering that about 85 percent of the world's energy consumption in 2017 originated from black energy and only 15 percent from green,” said Karsten Beltoft, Deputy Direcor at Insurance & Pension Denmark.

Pension funds are supporting the climate goals
The new industry survey also shows that in just four years, the Danish pension funds’ total renewable energy investments have more than doubled from DKK 41 billion (EUR 5,5 billion) in 2014 to DKK 101 billion (EUR 13,5 billion) in 2017. Moreover, it shows that today more than 80 percent of the pension funds' energy investments are within renewable energy.

"The Danish pension funds are increasingly supporting society’s green transition and at the same time, they are contributing to the long-term goal of the global community to limit global warming. This is also needed if EU's total CO2 emissions are to be reduced by 40 percent by 2030 to meet the two-degree target set out in the Paris Climate Agreement,” said Karsten Beltoft.

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In 2014, Danish pension funds invested 1.4 percent of the total Danish pension assets in renewable energy. By 2017, the proportion increased to 3.4 percent. The pension funds’ investments in fossil fuels have since 2014 remained relatively stable at 0.7 percent of the total Danish pension assets.

Phasing our investments in fossil fuels
Even though the global community continues to demand fossil fuels for heat, electricity and transport, many countries, including Denmark, have decided to phase out the use of fossil fuels and replace them with green energy sources in order to meet the objectives of Paris Agreement.

"As many countries start to phase out fossil fuels, it makes sense that pension funds follow this trend and decrease their commitment to the fossil energy sector. As we can see from the survey, this positive development has already begun, which means that pension funds already play a significant role in the green transition,” said Karsten Beltoft.

Source: Insurance & Pension Denmark (in Danish)

For more information about how to finance smaller or larger projects within climate adaption, energy, energy efficiency, environment and water, please see State of Green's white paper on "Financing the Green Transition".