PKA announced it has excluded a Chinese carmaker from its investment universe and put five more auto firms on its watch list, as the Danish pension fund manager sets tighter climate requirements for the world’s largest automotive brands.
PKA said it blacklisted Brilliance China Automotive, whose stock is listed on the Hong Kong stock exchange as well as several German bourses, due to its “lack of focus on climate” while also revealing it had placed brands Suzuki, Hyundai, Fiat Chrysler, Subaru and Mahindra & Mahindra under observation.
Dewi Dylander, head of responsible investment at PKA, said: “It is crucial for us that car manufacturers consider how they will contribute to the green transition.
“In the long term, a lack of climate strategy will pose an investment risk to our members,” she added.
A spokesman for PKA told IPE the firm had DKK1.4m (€190,178) invested in the Chinese auto maker in December 2019, before divesting the holding in early 2020 due to this transport sector climate initiative.
PKA, which manages four labour-market pension funds mainly in the health and social care sectors, said that in its new work on the auto industry’s climate impact, it had initially focused on 15 of the world’s largest carmakers in which it was invested.
Following the scrutiny exercise, it said nine of these remained on its list of investments.
The Danish pensions manager said its new focus on the automotive industry was an addition to its work on responsible investment and active ownership of oil, gas and coal companies.
Car firms were now subject to the same requirements as those fossil fuel companies, PKA said – to be willing to discuss a greener direction and to contribute to meeting the goals of the Paris Agreement.
The DKK330bn (€44.3bn) manager said the car firms identified for exclusion or observation had been deemed either to have an insufficient environmental strategy – or had simply been unwilling to engage with PKA about their climate ambitions.
“We ask, among other things, for the companies’ handling of climate-related risks, whether they are actively dealing with the Paris Agreement and if not, if they are prepared to discuss our concerns and how their business can become more sustainable in the future,” said Dylander.
PKA said the Paris-based International Energy Agency estimated that there needed to be 600 million electric and hybrid vehicles on the roads by 2040 in order to get closer to the goals of the Paris Agreement, with vehicle emissions currently accounting for almost 75% of all C02 produced by the transport sector globally.