Denmark’s MP Pension plans to exclude all fossil fuel-related companies from its investment universe in order to help limit climate change.
The DKK114bn (€15.3bn) pension fund for Denmark’s public sector university and secondary school staff said the move would excise 1,000 companies from its investment universe, freeing up more than DKK1bn.
Jens Munch Holst, chief executive of MP Pension, said: “Our ambition is to deliver the highest possible returns for our members, based on responsible investments.
“Given our stated goal of following the Paris Agreement’s recommendations for a better global climate, we must also take action to realise that goal.”
The fund’s board of directors has decided to divest of all shares in companies with exposure to oil, coal and tar sands.
In 2016, MP Pension resolved to make sure its investment policy supported the Paris Agreement’s goal of limiting the increase in average global temperature to two degrees above pre-industrial levels.
“This goal requires action by politicians and companies worldwide,” it said.
Munch Holst said the pension fund’s analysis showed that the decision to exclude fossil fuel companies would also benefit the fund’s overall long-term return.
The pension fund plans to sell all its coal and tar sands exposure by the end of this year, while oil shares will be sold before the end of 2020.
“MP Pension already has green investments of DKK3.5bn, and this figure will grow,” it said.
A year ago, Denmark’s PKA divested from five Canadian oil companies, meaning it had blacklisted 53 companies involved in fossil fuels in the space of two years.
However, it rejected a blanket ban on companies’ involvement in the fossil fuel sector, saying it wanted to know if the firms had long-term plans to be part of the renewable energy sector.
MP Pension’s new CIO Anders Schelde spoke to IPE about the fund’s investment strategy and how the fund has progressed since striking out on its own in 2015, in this month’s edition of the magazine.