Stockholm (NordSIP) – Insurance & Pension Denmark (IPD) and the Danish government announced plans for the pension industry to invest another €46 billion (US$ 50 billion, DKK$ 350 billion) in green transition between now and 2030.
The announcement took place at an event before the UN Climate Action Summit, this week. “I am pleased that the Danish pension industry has announced such a significant commitment to support the green transition,” commented the Danish Prime Minister Mette Frederiksen (Pictured, centre). “It shows that in Denmark we can do something very special when we set ambitious political goals and collaborate across the public and private sectors. Now we must work to get international investors involved. It is crucial to achieving the green transition globally.”
IPD is the trade association of Danish insurance firms and industry-wide pension funds. Most life insurance firms and industry-wide pension funds operating in the Danish market are members of the IPD. PensionDenmark, PKA, PFA and PenSam in addition to the trade organisation Insurance & Pension Denmark, represented the Danish pension industry at the climate action summit. Representing the Danish government will be the Prime Minister, the Minister for Climate, Energy and Utilities, and the Minister for Development.
“There is a need for investments coming from the private sector if we are to reach the UN Sustainable Development Goals and the Paris Agreement,” said vice-chairman in the trade organisation Insurance & Pension Denmark and CEO of PensionDenmark Torben Möger Pedersen (Pictured, second from the left). “According to our experience, investments in sustainable energy infrastructure, e.g. in windmill farms, both help find a solution to the climate challenge but also give good returns on investments. We have for some time invested in projects primarily in our part of the world. Through investments in the Danish SDG Investment Fund in 2018 and the Copenhagen Infrastructure Partners New Market Fund in 2019, we bring our experiences from sustainable investments to the growth economies of Latin America, Africa and Asia.”
These new flow of promised investments will accumulate on top of the existing € 16 billion (US$ 20 billion) as well as another €4 billion planned in green transition investments already held by the Danish pension industry. Current investments include green shares in Vestas and Ørsted, green Dutch sovereign bonds, offshore wind farms in the UK and Kenya, among many others. Future investments will focus on similar assets.
“The Danish pension industry agrees with the Danish government that with great ability comes great responsibility,” commented Per Bremer Rasmussen, CEO of Insurance & Pension Denmark. “Sustainable transition is a goal we have been working towards for some time. It is unique that we in Denmark have managed to increase the level of long term investments in green transition and simultaneously create a good rate of turn to the pension savers. This is a valuable experience that we would like to share, which is why the Danish pension industry already is reaching out to other international investors with the aim to create an even larger momentum for the green transition.”
“Based on this initiative, where we combine forces across politics and private investments and invest billions to improve the climate, we show a new and ambitious way to find the means necessary to enable a green transition,” Peter Damgaard Jensen (Pictured, first from the left), CEO of PKA, explained. We cannot do it alone. “But we can take the lead and inspire governments and investors across the world to follow our example and take the steps necessary to create a more sustainable future for our society.”
“It is important that the green transition is carried out rapidly, which requires ambitious political goals worldwide,” Torsten Fels (Pictured, third from the left), CEO in PenSam added. “The Danish government is showing the lead with an ambitious transition plan. Backed by the Danish pension savings, we can as an industry help to make this plan real. Cooperation between politicians and investors is a determining factor in the effort to bring about the green transition, nationally and internationally.”
Henrik Nøhr Poulsen (Pictured, second from the right), managing director for Global Strategic Partnerships at PFA, also concurred. “It is very gratifying that PFA and the Danish pension industry have been invited to New York and are being viewed as an important part of the solution to help reduce CO2 emissions around the world,” he said. “We bring to the table considerable experience in investments in green technology and experience being in dialogue with the energy sector, so we have a lot to offer. We are as large investors and through active ownership for example, used to pushing companies to move in a more sustainable direction.”
Image courtesy of IPD