Denmark’s PFA decides first sub-target for 2050 net-zero goal

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PFA Pension, one of Denmark’s largest pension companies, has announced its intention to reduce its climate footprint by 29% by 2025.

The company, which had DKK730bn (€98bn) in assets under management at the end of 2020, plans to reduce CO₂ emissions from its portfolios of listed equities, real estate and corporate bonds based on 2019 levels.

This is the first interim target within PFA Pension’s strategy to achieve net-zero carbon emissions by 2050, which the company has adopted as member of the UN-backed Net-Zero Asset Owner Alliance (NZAOA).

As a member of NZAOA, PFA commits to set new and stricter interim targets for CO₂ reduction every five years until 2050. Under the NZAOA’s target-setting protocol. members are supposed to set 2025 emission reduction targets within a 16-29 percent range, so PFA’s is at the highest end.

“The green transition must pick up pace,” said Allan Polack, group CEO of PFA. “Unfortunately, this was confirmed by the latest climate report from the UN Climate Council, which emphasises that CO₂ emissions must be reduced significantly. We are now choosing to set a new sub-target that will set a clear direction for how we invest our customers’ pension money.”

Polack added: “At PFA, we believe that a good long-term return and a low CO₂ footprint will increasingly be linked in the future.

“PFA supports the Paris Agreement’s goal of limiting CO₂ emissions, and it is our assessment that the green transition provides some interesting investment opportunities, so that we can create solid returns for customers and at the same time reduce the climate impact from our investments.”

As part of its long-standing sustainability strategy, the company has invested in the world’s largest offshore wind farms Hornsea 1 and Walney Extension Offshore Wind Farm, as well as six solar parks in England and Scandlines’ hybrid ferries.

Last year, PFA also divested its shares in 16 out of 18 energy companies and between 2019 and this year it has reduced CO₂ emissions from its corporate credit assets by more than 35%.

In the summer of 2020, PFA launched a climate pension product called PFA Klima Plus for climate-conscious customers. The product returned 26.5% since its launch.

Other NZAOA members to have announced 2025 sub-targets include Alecta and Nordea L&P.