ATP succumbs to ethical pressure
DENMARK - Danish pensions giant ATP may change the way it makes and implements ethical investment choices, as a result of a review being launched in the wake of criticism about pension funds' holdings in nuclear weapons firms.
Recent public criticism of ATP - which manages group assets of DKK445bn (€65bn) - and its investment in businesses linked to the production of nuclear weapons has come from the Danish trade union movement in particular.
Jørgen Søndergaard, supervisory board chairman at the labour market supplementary fund told IPE: "We're going to make an evaluation of the guidelines. We don't have a fixed term for that. It will take place in one or more board meetings over the course of this year. But we'll look at how other investment funds have made up their guidelines to see if we can learn anything from them.
"The discussions will be open, to see if there is any need to change things," he added
Søndergaard said the debate has erupted on the back of moves by the Norwegian Government Pension Fund and the way it established rules around ethical investment.
"They have a very different set up, they have a committee, and they have a negative list of shares they don't want to invest in. But it was the nuclear weapons debate that prompted discussions at the board," he said.
In 2004, Norway's Government Pension Fund established ethical investment guidelines which contained three elements: exercise of ownership rights, negative screening and exclusion of companies.
According to the Norwegian Finance Ministry, the government-appointed Graver Committee - whose report formed the basis for its ethical guidelines - pinpointed two key ethical obligations on the fund: it should be managed to achieve a high return to benefit future generations, and also ensure the fundamental rights of those affected by companies in which the fund invests be respected.
Within its current investment guidelines, ATP does have a section on social responsibility, as Søndergaard explained: "The basis of the current guidelines is that we allow investment in all companies if they comply with all legal requirements", and those of major international organisations.
Back in 2006, ATP sold its shares in a number of companies which supplied components for cluster bombs, even though there were no international conventions forbidding the production and use of the controversial weapons.
That decision was largely made because the Danish government was pushing for the introduction of global conventions against the use of such weapons, an ATP spokesman confirmed.
In a separate mov, ATP has announced it is to become a partner in the Carbon Disclosure Project (CDP) - an international initiative to get business owners talking to companies about their carbon footprint and what they can do to reduce it.
ATP is the first organisation in Denmark to link to the project as a partner, and its role will involve shaping data and measurement methods so other organisations within Denmark will be encouraged to take part.
The UN Climate change conference, which will be held in Copenhagen next year, has sharpened the focus on climate matters and CO2 emissions among Danish businesses and investors, it said.
Lars Rohde, director of ATP, said: "The project gives us useful tools to create a picture for ourselves of the companies and their business options and risks in relation to climate trends and their social responsibility."
That said, he stressed ATP wanted to prompt companies to focus more on climate challenges, but not force them to do so.
"Danish businesses have a good story to tell, and one which should be shared with the rest of the world," he said. "So we hope that a lot of Danish businesses will take part in the annual inquiry so that they can equip themselves to meet the growing climate challenges."
The annual inquiry involves questionnaires which allow companies to see how they are performing on climate issues and where there is room for improvement, ATP explained.
Including ATP, the CDP now has partners in 15 countries, it said.
But this latest development follows the launch last week of the Environment Code by the Investment Property Databank (IPD), which is designed to help companies understand the carbon emissions a building produces - through the measurement of energy use and production, waste and water. (See earlier IPE story: Environment code to calculate property's carbon emissions)
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