In a week of climate-focused events and discussions for the Nordic pensions sector, Denmark’s pensions lobby has revealed the country’s pension funds have been investing so heavily in green projects in the past year that they are now on track to honour a long-term pledge three years early.
At the Climate Investment Summit, held in Copenhagen on Monday and Tuesday, Insurance & Pension Denmark (IPD) announced the country’s pension funds had already invested DKK50bn (€6.7bn) in environmental projects out of the DKK350bn they pledged last year at the New York Climate Action Summit.
Kent Damsgaard, IPD’s chief executive officer, said: “We have got off to a great start with DKK50bn of green investments, but we must not rest on our laurels.”
The association said that if this level of investment could be maintained, the DKK350bn goal would be met three years earlier than expected.
“We can well afford to be proud that the Danish pension companies have already invested far beyond their preliminary goals. And that in a year marked by the worst global health crisis in 100 years and with turmoil in the financial markets,” Damsgaard said.
He added that it would require “massive investment” to reach the goal of the Paris agreement, and that this could only be achieved through close collaboration between the public and private sectors, to make the necessary green investments happen and inspire the rest of the world.
“The task is to contribute to the green transition and at the same time ensure a good and stable return on individuals’ pension savings,” Damsgaard said.
Last week, several Nordic pension funds took part in a meeting between Nordic prime ministers, with discussions also focusing on the contribution of investment to the transition to a low-carbon economy.
At the meeting, chaired by Danish Prime Minister Mette Frederiksen, a joint declaration was made that the Nordic countries could and should take the lead on the green recovery, according to the Climate Investment Coalition – a partnership between the Danish government, IPD, the Institutional Investors Group on Climate Change (IIGCC) and World Climate Foundation.
The declaration stressed the urgency of mobilising private green investments and the interdependency of the public and private sector in meeting the goals of the Paris agreement, the coalition said.
Nordic pension fund CEOs attending the meeting – including Laila Mortensen of Denmark’s Industriens Pension who is also IPD’s chair, Niklas Ekvall of Sweden’s AP4, Risto Murto of Varma in Finland, and Ólafur Sigurðsson of Iceland’s Birta Pension Fund – also announced their aim to facilitate collective green investment commitments by 2030, according to the coalition.
The partnership said a process would now take place to collect commitments for green investments from other Nordic institutional investors in Finland, Iceland, Norway, Sweden, the Faroe Islands, Greenland and Åland, with these to be detailed at the COP26 UN climate change conference in Glasgow in November 2021.
In a joint column in Danish newspaper Politiken today, the Minister of Climate and Energy and Public Utilities Dan Jørgensen, IPD’s chair Mortensen and Michael Rasmussen, the cahor for the financial sector association Finance Denmark, said Denmark was one of the best countries in the world at creating good frameworks for the green transition which could attract private investment from big financial players.
“That is why many other countries look to Denmark for inspiration,” they said, citing the Nordic prime ministers’ meeting.