DENMARK - The Danish government is to publish an action plan which will outline how to meet the growing "expectations and challenges" of corporate social responsibility (CSR) in mid-May.

The action plan entitled 'The road to responsible growth' has been developed by seven Danish government ministeries and aims to address the issue of how to promote the incorporation of ethical considerations into the investment strategies of pension funds and companies.

Victor Kjaer, deputy director of the Danish Commerce and Companies Agency (DCCA), said although there had been "numerous surveys" on the link between CSR and corporate financial performance, the industry still needs "practical understanding about how investment decisions can include CSR on a clearer and more objective basis".

He told delegates at the IMN Scandinavian Institutional Investors Summit in Copenhagen, Denmark, earlier this week a successful conversion of CSR into a more "hands-on" method for investment decision-making will require co-operation and dialogue between investors, companies and researchers.

As a result, the Danish government is planning a roundtable conference on Socially Responsible Investment (SRI) which will bring together SRI experts including academics, policymakers and institutional investors.

Kjaer revealed the results of the roundtable would form the basis of the government's "focused and application-orientated SRI research agenda", and highlighted the work would go towards the setting up of an international research fund to support new research on SRI issues.

In addition, Kjaer told the conference the Danish government has also launched a "strategic partnership" on climate change to help companies reduce energy consumption and greenhouse gas emissions.

The partnership aims to identify the obstacles to an active investor role, and the data collected by the project - including from other sources such as the Carbon Disclosure Project (CPD) - will be published in an annual publication to be used by investors, which will outline the progress Danish companies are making on climate change issues.

Kjaer said most of the 46 pension institutions in Denmark already take ESG issues into consideration in investment issues, but admitted defining ethical issues is a complex process and poses major practical challenges.

He warned "an ethical investment profile may mean lower pension returns in the transitional phase", while the investment industry has realised CSR is not "cost-free", which means responsible investment "encompasses several dilemmas that an individual has to address".

Kjaer also pointed out while most Danish pension funds have put ESG on the agenda, it is in "varying degrees of scope", as he warned responsible investing "does not stop at screening certain companies" as it could include giving higher priority for investment in companies which incorporate strategic CSR.

That said, he claimed Denmark has an"excellent starting point" for promoting concern about ESG issues both domestically and abroad, as it has "general investment rules that enable ethical concerns to be integrated on a proper basis"and a financial sector in which "pension funds and insurance companies have already shown their willingness to make an effort, and we expect even more to join their ranks".

If you have any comments relating to this article please contact Nyree Stewart on +44 (0) 207 261 4618 or