Danish pension provider Danica has drawn up a long list of fossil fuel companies it considers laggards when it comes to achieving climate neutrality, and has sold out of those securities in favour of firms in the same broad sector with good transition plans.
In an announcement yesterday, the DKK400bn (€53.6bn) subsidiary of Danske Bank said it was implementing a stricter approach to companies with fossil fuel activities, explaining that this included much of the fossil fuel value chain.
It said: “This means that more investments have been divested, and investments are targeted at companies with good transition plans.”
The Lyngby-based pensions institution said it had added around 1,730 companies with fossil fuel activities to its investment restriction list compared to 2024, and divested holdings in any of those companies it had been invested in — without saying how many stocks were divested.
The blacklist includes major oil and gas companies such as Shell, Exxon Mobil and Equinor.
Poul Kobberup, Danica’s chief investment officer, said: “We believe that the most transition-ready fossil companies also have the potential to deliver competitive risk-adjusted returns to our clients in the future.”
“Based on independent climate models and data, we can even more effectively pick companies with a top management climate focus, and realistic plans to become climate neutral, or which are well on their way,” he added.
After the sell-off, Danica said it still had the same level of exposure overall to companies involved with fossil fuels.
It clarified that the new approach and analysis model applied to companies with 5% or more of their revenue coming from exploration, production, distribution, refining, transport, storage, energy production and equipment and services within fuels such as coal, oil, gas or tar sands.
It applied to direct equity and bond investments, but not emerging market debt, in its pension products Danica Balance, Danica Tidspension and Danica Traditionel, the provider noted.
“The overall investment portfolio remains well-diversified and robust, even though we are being more selective within the fossil sector,” Kobberup said.
“We’ll continue to have investments related to fossil fuels that meet our requirements, and will continuously reflect developments within the global energy market and customer wishes,” he said.
The CIO stated that Danica was continually assessing companies’ climate plans, and would exclude firms that changed course and no longer met the pension firm’s criteria.
“Conversely, companies can potentially be included in the portfolio if their climate plans are improved and meet our criteria,” Kobberup concluded.
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