PKA, which runs four labour-market pension funds in Denmark, said it has lowered its tolerance for coal operations within companies it invests in, and blacklisted firms with more than 20% of their business in the fossil fuel market.
The Copenhagen-based pension fund manager said the move had led to the divestment of 20 firms on coal grounds, but said it was keeping some firms in its portfolio which did exceed this limit but had nevertheless shown they were willing to adapt to more sustainable energy.
Dewi Dylander, head of responsible investment at PKA, said: “There is no room for companies that are not willing to adapt to a reality with less coal and more green energy, and therefore we are now tightening the requirements for the coal sector and excluding a large number of coal companies.”
The latest list of exclusions PKA has published include US company NRG Energy, the parent company of the Hong Kong Electric Company, and the Indonesian government-owned electricity company Perusahaan Listrik Negara.
PKA also said it had entered into dialogue with 12 additional companies that derived over 20% of their turnover from coal operations, with Dylander saying this was how the pension fund could create the biggest change to the industry.
“These are companies where we are making an exception because they have listened to the call that we and a large number of other investors have made to switch away from coal,” said Dylander.
PKA said these 12 companies, along with all other coal, oil and gas firms, would be evaluated at the end of 2022 at the latest, to assess whether they had successfully incorporated the goals of the Paris Agreement into their operations.
The pension provider said the dialogue would take place through the investor initiative Climate Action 100+, which represented 450 investors and €35.6trn of assets under management, adding that PKA had already blacklisted a total of 89 coal firms to date, as well as 68 oil and gas companies.
Last month, PKA said it was divesting from Brilliance China Automotive due to the Chinese carmaker’s “lack of focus on climate,” also revealing it had placed industry giants Suzuki, Hyundai, Fiat Chrysler, Subaru and Mahindra & Mahindra on watch.