Danica Pension has joined a now 26-strong group of asset owners committing to a carbon-neutral investment portfolio by 2050, with the DKK450bn (€60bn) provider stating it viewed active ownership as an important tool for doing so.
It is now the fourth Danish member of the UN-convened Net-Zero Asset Owner Alliance, after MP Pension and PFA joined in the past two months; PensionDanmark was a member at launch.
Danich Pension CEO Ole Krogh Petersen said the provider’s €60bn in assets under management “can make a huge difference for the green transformation”.
“That is our focus already now and will be for many years to come,” he said, adding that long-term ambitions were “a good thing but acting in a timely manner is even more important”.
Danica is aiming to have DKK30bn invested in the “green transformation” by 2023, DKK50bn by 2025, and DKK100bn by 2030; the latter represents around one-fifth of the provider’s current assets under management.
In the first quarter, Danica increased its green transformation investments by 38%, from around DKK10bn to DKK14bn.
Announcing its net-zero commitment, Danica said it saw active ownership as an important tool in the work to achieve a carbon-neutral portfolio.
“By addressing climate issues through climate dialogue and voting at general meetings, Danica Pension as an investor can help, encourage or require the companies to transform their business on a scale and at a pace that is consistent with the Paris Agreement’s 1.5° target,” it said.
Earlier this month Danica released its first climate report, according to which the CO2 emissions related to its equity and corporate bond investments were 33 tons per DKK1m invested at the end of 2019, 21% less CO2 than the global benchmark for these asset classes.
The Net-Zero Asset Owner Alliance was launched in September. Its action “focuses on implementing the Paris Agreement, the main goal of which is to limit the rise in global average temperature to 1.5°C”.
Participating investors’ must emphasise emission reduction outcomes in the real economy. According to the alliance, those joining make their commitment to net-zero “in the expectation that governments will follow through on their own commitments to ensure the objectives of the Paris Agreement are met”.
The Net-Zero Asset Owner Alliance is part of a new campaign called Race to Zero that is seeking to build momentum ahead of COP26, rescheduled for November 2021, by rallying the private sector, including finance, to achieve net zero emissions by 2050.
It is under the stewardship of Nigel Topping and Gonzalo Munoz, UN high-level climate champions for the UK and Chile, and supported by Mark Carney, UN special envoy for climate and finance and advisor to the UK government on COP26.