Danish pensions administrator PKA is investing DKK415m (€55.8m) in green bonds and expects to put more money into the instruments as it works to integrate climate considerations into all of its asset classes.
PKA, which manages around DKK200bn on behalf of three labour-market pension funds, said it bought the green bonds from Germany’s development bank Kreditanstalt für Wiederaufbau (KfW) and from the European Investment Bank (EIB).
Of the total investment, DKK265m has gone into the KfW bonds, which are guaranteed by the German state, have a maturity of five years and are expected to yield 1.65% a year.
The remaining DKK150m has been invested in green bonds issued by the EIB, which are guaranteed by the EU, run for 10 years and have an expected annual return of 2.15%.
The money raised through the bond issues by both institutions is used to finance projects within the areas of sustainable energy and increased energy efficiency.
Peter Damgaard Jensen, managing director at PKA, said: “We expect to invest in more green bonds as an instrument to meet the global need for investments in sustainable energy and increased energy efficiency.”
PKA wanted to integrate climate considerations into all of its asset classes, he said, adding that green bonds were an investment area the provider had long been interested in.
“The projects that are included are areas that PKA already invests in significantly, so green bonds are an extension of our strategy of raising our investment in sustainable energy,” he said.
The pensions administrator said it now had DKK13bn invested in CO2-reducing projects.
PKA noted that UN Secretary General Ban Ki-moon recently called on pension funds to invest in climate-friendly sustainable energy.