At an event prior to the UN Climate Action Summit, the Danish pension industry has in collaboration with the Danish government announced plans for the pension industry to invest more than EUR 46 billion in green transition towards 2030. Investments will be in energy infrastructure and other green activities such as green stocks, green bonds and investments in energy efficient construction. The Danish pension industry already invests more than EUR 16 billion and investments for another EUR 4 billion are planned out. Given the new investments, a substantial increase in the level of investment in sustainable transition will take place.
At the climate action summit, the Danish Prime Minister, the Minister for Climate, Energy and Utilities, and the Minister for Development are representing the Danish government. The Danish pension industry is represented by the pension funds PensionDenmark, PKA, PFA and PenSam in addition to the trade organisation Insurance & Pension Denmark.
The new investments will help the Danish government giving Denmark a leading position globally in terms in green investments. Backed the size of Danish pension savings, which adds up to more than EUR 410 billion, the Danish pension industry is ready to take on its part of the task ahead, the industry states.
Prime Minister Mette Frederiksen stated in a press release:
“I am pleased that the Danish pension industry has announced such a significant commitment to support the green transition. It shows that in Denmark we can do something very special when we set ambitious political goals and collaborate across the public and private sectors. Now we must work to get the international investors involved. It is crucial to achieve the green transition globally.”
“There is a need for investments coming from the private sector if we are to reach the UN Sustainable Development Goals and the Paris Agreement. According to our experience, investments in sustainable energy infrastructure, e.g. in wind farms, both help find a solution to the climate challenge but also give good returns on investments. We have for some time invested in projects primarily in our part of the world. Through investments in the Danish SDG Investment Fund in 2018 and the Copenhagen Infrastructure Partners New Market Fund in 2019, we bring our experiences from sustainable investments to the growth economies of Latin America, Africa and Asia,” said Vice Chairman in the trade organisation Insurance & Pension Denmark and CEO of PensionDenmark, Torben Möger Pedersen.
10 per cent of total pension assets in 2030 will be green
According to Danish newspaper Berlingske, the gigantic investment means that 10 per cent of total pension assets in 2030 will be earmarked green investments. This corresponds to 12 per cent of the total Danish gross domestic product and more than half of the total public consumption in Denmark in a whole year.
“But this figure may well increase if attractive investment opportunities prove to be the case,” Danish newspaper Børsen quotes Torben Möger Pedersen (in Danish).
“Based on this initiative, where we combine forces across politics and private investments and invest billions to improve the climate, we show a new and ambitious way to find the means necessary to enable a green transition. We cannot do it alone. But we can take the lead and inspire governments and investors across the world to follow our example and take the steps necessary to create a more sustainable future for our society,” said CEO in PKA, Peter Damgaard Jensen.
“It is important that the green transition is carried out rapidly, which requires ambitious political goals worldwide. The Danish government is showing the lead with an ambitious transition plan. Backed by the Danish pension savings, we can as an industry help to make this plan real. Cooperation between politicians and investors is a determining factor in the effort to bring about the green transition, nationally and internationally,” said CEO in PenSam, Torsten Fels.
“It is very gratifying that PFA and the Danish pension industry have been invited to New York and are being viewed as an important part of the solution to help reduce CO2 emissions around the world. We bring to the table considerable experience in investments in green technology and experience being in dialogue with the energy sector, so we have a lot to offer. We are as large investors and through active ownership for example used to pushing companies to move in a more sustainable direction,” said Managing Director for Global Strategic Partnerships in PFA, Henrik Nøhr Poulsen.
“The Danish pension industry agrees with the Danish government that with great ability comes great responsibility. Sustainable transition is a goal we have been working towards for some time. It is unique that we in Denmark have managed to increase the level of long term investments in green transition and simultaneously create a good rate of turn to the pension savers. This is a valuable experience that we would like to share, which is why the Danish pension industry already is reaching out to other international investors with the aim to create an even larger momentum for the green transition,” said CEO in Insurance & Pension Denmark, Per Bremer Rasmussen.
Already on the night before Monday Prime Minister Mette Frederiksen announced that Denmark will allocate approx. EUR 21 million to the Global Climate Facility. According to the prime minister, the fund should help get green investment “where the money does not come by itself”.
International investors support the plan
According to PKA (in Danish), a number of international investors support the Danish pension sector and the government’s plan for how the green transition can be financed with the investment by 2030.
Among the companies that showed support for the plan to mobilise large investments in green transition at the Danish event in New York are the New York State Common Retirement Fund, PFZW from the Netherlands and Storebrand Asset Management from Norway. Together, they manage assets for more than DKK 3.5 trillion.
Insurance & Pension Denmark (in Danish)
The Prime Minister’s Office (in Danish)
Børsen (in Danish)
PKA (in Danish)
Photo: Insurance & Pension Denmark