Danica Pension has completed its first biodiversity mapping of its equity and bond investments in order to better manage investment risk, while working to restore and protect nature.
The Danske Bank subsidiary is now the first Danish pensions company to publish results of how its investment strategy affects and depends on biodiversity.
The biodiversity map supports the Montreal Biodiversity Agreement and acts as a new measure for setting future biodiversity targets, the firm announced.
“Approximately two-thirds of investments have a potentially high impact on various ecosystems and biodiversity via their operation. In particular, they contribute to the loss of biodiversity through their CO2 emissions, pollution, and overuse of natural resources,” Danica stated.
Additionally, Danica investigated the extent to which investments are dependent on biodiversity and healthy ecosystems in order to produce goods and services. The results revealed, “that a third of investments have a potentially high dependence on natural resources such as water, trees, plants, and animals as well as protection against storms and floods”.
The firm was able to determine that investments in mechanical engineering, pharmaceuticals, energy, and food processing have “potentially the greatest damage and dependence on biodiversity”.
Søren Lockwood, chief executive officer, said: “It is an investment risk when nature decays, and with the mapping, we get the first, overall insight into the biodiversity conditions of companies we invest in and where we need to take action.”
However, it is still unclear how Danica’s equity and bond investment strategies will change following discoveries made from its biodiversity mapping. The company has made clear, though, that it is determined to improve its green transition while setting CO2 reduction targets and reducing the overall climate impact to minimise biodiversity loss.
Additionally, Danica has initiated a targeted effort to help companies’ actions in marine and forest areas to help them beneficially impact natural areas, improve the overall reporting, and continuously follow up on their progress.
Danica expects its efforts to map its environmental impact will act as a new reporting standard for Danish and other international pensions alike.
The World Wide Fund for Nature (WWF) vocalised its support of Danica’s environmentally conscious strategy, with Bo Oksnebjerg, WWF’s secretary general, stating, “The nature crisis is escalating and we have only limited time to reverse the trend. Therefore, I would strongly encourage the other Danish pension funds to follow suit and get started on their work with biodiversity.”