Lærernes Pension, the Danish pension fund for teachers, has announced it has overhauled its ethical investment code by incorporating the Paris Agreement goals on climate change mitigation – a change which has already led to the blacklisting of 42 more companies.
Karsten Kjeldsen, Lærernes Pension’s chief executive officer, said: “With our update of the code, we have moved in a more sustainable direction.
“We already have many green investments, but we also have to accept that we can do more, and that it is important for our members that we invest responsibly, and of course we have to deliver on that,” he said.
The pension fund is broadening its ethical code – which already banned firms producing energy from coal, or involved in Arctic drilling or oil sands – to exclude companies involved in exploration, extraction or energy production of all fossil fuels, unless the firm is undergoing a transformation in line the Paris Agreement.
The rules have a tolerance threshold of 5%, it said, meaning that the fund can still invest in stocks with less than this level of banned activity.
As a first step, the Danish pension fund said the revamped code had resulted in 42 more companies being put on its blacklist, but that many more would soon be added.
The new blacklistings include US firearms manufacturer Smith and Wesson, the UK’s Avon Rubber and Solar Industries India – on the grounds of its involvement in controversial weapons – bringing the pension fund’s total list of exclusions to 545 firms.
Katrine Graabæk Mogensen, ESG manager at Lærernes Pension, told IPE that the pension fund had holdings in 28 of the 42 stocks exiting its investment universe.
These had a market value of around DKK600m (€80m) and would be sold off in the first half of 2021, she said.
As a second step in the Paris-linked alignment, Graabæk Mogensen said the teachers’ pension fund was analysing an even larger set of companies, but had not yet finalised this work due to data issues.
“We expect to have made sufficient progress during 2021 to decide on additional exclusions,” she said.
Lærernes Pension had total assets of DKK119bn at the end of 2019.