DK Pension Funds Increase up to x5 in Green Investments

Stockholm (NordSIP) – Danish pension companies are investing up to five times more in renewable sources than prior to the five year period leading up until 2018, according to a report in the Danish daily Politiken. The pension companies’ total investments in wind turbines, solar cells and biofuels have more than doubled from 41 to over DKK 100 billion in the period between 2014 and 2017.

Danish pension companies invested a total of 1.4 per cent of total pension assets in renewable energy in 2014. This rose to 3.4 per cent in 2017.

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A new survey prepared by Forsikring & Pension (the Association for Insurances and Pensions) shows that the pension companies now invest five times as much in green and renewable energy sources by comparison to their investment in traditional fossil fuel industries. Over 80 per cent of Danish pension fund investments are therefore now in renewable energy.

“Considering that about 85% of the global energy consumption is still derived from traditional energy sources, one must conclude that the pension industry is at the forefront of the objectives for the green transition of both Denmark and many parts of the world,” said Karsten Beltoft, Deputy Director of Forsikring & Pension.

Nonetheless, pure idealism isn’t the main driving force behind the transition. “Green energy and infrastructure are a very good and stable alternative to bonds and shares,” said Torben Möger Pedersen, director of PensionDanmark. With low interest rates challenging returns from traditional bond investments, the move towards green investments has made pure financial sense for the pension companies.

However, not everyone is equally impressed. “We know there are huge differences in pension company investments in green energy, and these still represent a rather small proportion of their total assets,” said Charlotte Fischer, head of the Danish green think tank Concito. “We would like companies to set concrete deadlines for when they will completely drop investments in coal and oil. Plenty of companies have already blacklisted that type of investment,” she said.

“It is possible to ensure returns and simultaneously set reasonable green objectives,” she added.

Image: (c) Olivier Le Moal-shutterstock