Stockholm (NordSIP) – MP Pension, the pension fund for Denmark’s public sector university and secondary school staff, is to exclude over 1,000 fossil fuel companies from its investment portfolio in the coming years.
MP Pension’s board of directors decided to dispose of all shares in oil, coal and tar sands in an announcement made official two weeks ago. The move follows MP Pension’s decision in 2016 that its investment policy should reflect the targets set forth in the Paris agreement of limiting temperature rises to 2 degrees Celsius.
“Our ambition is to ensure the highest possible returns for our members based on responsible investments,” said MP Pension Managing Director Jens Munch Holst. “If we aim to follow the Paris agreement’s recommendations for a better global climate, deeds must reflect words. Our own analysis shows that overall returns will benefit [from the exclusions] in the long term.”
The decision means MP Pension will sell all its fossil fuel stocks, excluding over 1,000 companies from its investment universe. Companies in the coal industry and tar sands sectors will be sold this year, with oil company stocks following by the end of 2020. The returns, which will release DKK 1 billion, will then be invested elsewhere and added to MP’s already existing green investments amounting to DKK 3.5 billion.
“We believe in green change, both when it comes to the future of the globe and to ensure best investments. Fossil fuel companies are welcome back in our portfolio if they convert their production and business model into a more climate-friendly direction,” Holst added.
Meanwhile, MP Pension has also invested DKK 360 million in the Green Cornerstone Bond Fund, a green bond fund focusing on developing countries and emerging markets. The fund invests in climate-friendly projects in the areas of renewable energy and environmentally sound transport, and is supported by World Bank sister organisation International Finance Corporation (IFC).
“The fund is of particular interest to us because of the strong partners and significant green profile, coupled with good returns. Generally, there are great climate gains to be made by investing in green initiatives in developing countries, corresponding to the major investments needed to achieve the objectives of the Paris agreement, said MP Pension bond manager Pernille Jessen.
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