The Missing Middle: DK Pension Companies and Human Rights

Stockholm (NordSIP) – A report from Mellemfolkeligt Samvirke, a Danish human rights organisation, is taking Danish pension funds to task for being involved with unethical investments, despite their documented statements of propriety in as far as their sustainable investments are concerned.

The accusations based on the findings of a special report from MS are harsh and direct. The summary is that 10 Danish pension funds combined have invested DKK 5.5 billon in companies with dubious ethics, such as Shell, accused of over 1,000 oil spills in the Niger delta in the past few years, or sanitary products producer Wilmar, which, according to Amnesty International, employs child labour.

“At some point it becomes impossible for us to ignore, when we are such a big part of infringing on human rights and ruining possibilities for our children and grandchildren,” said Samvirke spokeswoman Helle Munk Ravn.

The accusations are serious enough that the Danish minister for business and industry, Brian Mikkelsen, was compelled to make a public statement. “It is the imperative of private investors to make sure their own houses are in order,” and to promote responsibility in global value chains and fund portfolios, he said.

Samvirke acknowledges the work of pension companies in terms of having strengthened responsibility and transparency in recent years, including their efforts to change companies’ behaviour.

Still, the report’s findings are serious enough that a number of pension companies were compelled to answer the charges in a Danish daily, Politiken.

“It’s important for us to point out that the report from Mellemfolkeligt Samvirke doesn’t focus on the dialogue and active management that we spend a lot of time on at PFA,” commented Andreas Stang, senior portfolio manager at PFA. “The report focuses on older cases and data that we have addressed a long time prior. In this way, it looks like we have uncritically invested in an e.g. environmentally damaging company, whereas our continued investment in Shell is a result of continuous dialogue related to the company’s continual upgrading of its ethical practices”.

“We screen out investments four times a year and conduct an active dialogue with those companies who cannot document their comprehension for our policy concerning responsible investments,” he continued. “That dialogue can directly affect a company’s behaviour, so when we see that a company doesn’t adapt, we sell the investment and exclude the company, as we have done with Wal-Mart and Heidelberg-Cement.”

Stang responded to a number of other challenging questions. Other pension companies criticised in the report provided their own responses: Ulrika Hasselgren, the recently installed chief for Responsible Investments at Danske, suggested that ESG-screening is an integrated part of Danske’s investment process, and that decisions are made based on an already stringent set of investment criteria including OECD and UNDP guidelines.

Other companies named in the report, such as PensionDanmark, Sampension, Industriens Pension, TopDanmark, AP Pension, and PenSam Liv gave detailed accounts to Politiken of their sustainable investment practices.

The recurring issue appears to be that the criticisms in the Samvirke report don’t reflect substantive efforts and upgrades made within the last few years among the pension companies.

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