Denmark’s biggest pension fund, ATP, which runs the population-wide labour-market supplementary pension scheme, has made a announcement that it is increasing its climate ambitions and will make DKK200bn (€27bn) of green investments by 2030 – an amount equalling more than a fifth of its current assets.

Half of those investments, DKK100bn will be made by 2025, the pension fund said this afternoon.

In a statement, ATP said today’s announcement made it “Denmark’s potentially largest green investor”.

New measures ATP said it will take include requiring all portfolio companies to report their CO2 emissions by 2025, and by 2030, a 70% reduction of CO2 emissions for its listed equities, corporate bonds and properties compared with emission levels in 2018, according to the announcement.

By 2050, the pension fund said it would “join the ambitions of being CO2 neutral – both as a company and through our investments and active ownership”.

Bo Foged, chief executive officer of the DKK927bn pension fund, said: “We simply cannot afford not to – for two reasons. Firstly, it is obvious to all that the global climate needs a green transition and concrete action now.”

This was one of the reasons why ATP was making an announcement for 2025, he said.

Secondly, Foged said in the news released just days before the 2021 United Nations Climate Change Conference, COP26, in Glasgow, the green transition would be “a fantastic opportunity to create good returns over the next many years”.

“This is driven by the fact that new business solutions for existing climate challenges must be found within many sectors,” the CEO noted.

He said ATP believed the “winners of the future” thought and acted green.

“At the same time the climate challenges also represent a considerable business risk which can hit our investments and must therefore be offset. So economically, we cannot afford not to take action now,” Foged said.

However, ATP also said the ambitions were being made under a number of conditions, and linked its press release to a separate document listing those.

In this, it said: “ATP’s climate ambitions are set up under the same overall framework as the commitments in the Forsikring & Pension (Insurance & Pension) sector”.

The sector’s commitments were conditional and based on an expected market situation towards 2030, ATP said, adding that they depended on market conditions – that there were sufficient green investments and that they created a good return — and company-specific conditions, namely that the development in pension contributions continued in the expected scope and that the guaranteed pensions did not force the companies to change investment allocation.

The commitments also depended on political conditions, ATP said, specifically, ”that socio-economic framework conditions continue to support the green transition, making green investments relatively attractive and less risky”.

Looking for IPE’s latest magazine? Read the digital edition here.