Danish pensions giant PFA has reported that more than DKK3bn (€403m) of pension savings have flowed into its new PFA Klima Plus product since its launch last May, which it said testified to the “huge interest” among customers in putting their savings to work for the benefit of the climate.
More broadly, a new analysis from BNP Paribas showed there had been a doubling of contributions to sustainable funds in 2020, according to PFA’s chief strategist.
Tine Choi Danielsen, chief strategist at PFA, said: “In 2020, the return from PFA Klima Plus since its launch in May beat the broad equity index by approximately 2%, and the green money tank has already grown to over DKK3bn.”
Carbon emissions linked to the climate product’s investment portfolio were currently 75% below the MSCI broad equity index, she said, and the product had a goal to become carbon neutral by 2025 and carbon negative by 2030.
Danielsen said the analysis from BNP Paribas also showed that contribution levels to sustainable funds had consistently broken records since 2018 – even though contributions to many other investment funds had remained steady or declined since then.
“At the same time, equities and investment funds with high ESG ratings have generally been a good investment and over the past five years have outperformed the broad market,” she added.
Choi Danielsen said the growing interest in climate-friendly products was also being aided by global politics, through increased reporting requirements and government funding for sustainable ventures.
In the EU, she said, a large proportion of the €750bn coronavirus aid package recently announced was earmarked for sustainable investment, while in the US, President Elect Joe Biden was re-entering the country into the Paris Agreement and allocating billions for investment in more sustainable infrastructure.
In China, Choi Danielsen said, President Xi Jinpeng announced last year that the country would become carbon neutral by 2060.
Analysing interest in PFA’s climate-friendly pension product, she said it was “clear that age plays a role”.
Those aged between 25 and 44 were strongly over-represented, she said, while those aged 45 to 54 were slightly over-represented. Customers aged over 55, meanwhile, were strongly under-represented, she said.