The head of Danish fund AkademikerPension said the pension fund will immediately exclude Russian government bonds and shares in Russian state-controlled companies if the country invades or attacks neighbouring Ukraine.

Responding to the increasingly tense situation on the border between Ukraine and Russia, the pension fund’s chief executive officer Jens Munch Holst said: “The situation is very serious and we take Russia’s behaviour very seriously.

“And our position is clear. If Russia attacks and/or invades Ukraine, we will immediately exclude the country,” he said in a statement on the DKK160bn (€21.5bn) pension fund’s website.

In the event of an exclusion, AkademikerPension said it would sell all government bonds as well as bonds and shares in companies in which the Russian state owned more than 50%, while making no new such investments.

A spokesman for AkademikerPension told IPE the pension fund currently has a total of $61m invested in Russian state-owned companies and government bonds. This comprises $44m of Russian state bonds, $15m in the bonds of Russian owned companies and $2m in the stocks of such firms.

Another option, the pension fund said, was to quarantine the country, which meant the fund would make no new investments in such state assets.

“Right now, Russia is a millimetre away from landing in quarantine,” said the CEO.

“It is a day-to-day decision and we are following the situation closely. Anything can happen. Maybe we will quarantine the country with a subsequent exclusion, but hopefully it will all end with a good international agreement with a de-escalation,” he said.

In 2020, the pension fund blacklisted state-linked Chinese investments, divesting €54m of equities and bonds on human rights grounds.

The pension fund said that when it came to excluding a country from the portfolio, the process was very complex with many assessments to be made.

Overall, the Danish pension fund said, it was trying to exclude the countries that ranked lowest in terms of human rights, and so on, while being transparent about where it had to compromise in order to safeguard members’ pensions and invest responsibly.

This was in line with what was expected of it under international guidelines for responsible investment, the pension fund said.

Munch Holst said each time the pension fund excluded a country, there was another that was “almost as bad”, and deciding whether to banish that one too was the challenge when dealing with exclusion, he said.

“Russia is one of several countries that have long been candidates for exclusion,” he said.

“There is no doubt that its conduct and aggression at the Ukrainian border means that an exclusion has only moved closer, and that Russia will overtake many other candidates in the event of an active war effort,” Munch Holst said.

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