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Formed over a century ago as part of the Danish cooperative movement, AP Pension is now a major customer-owned pensions provider. Its portfolio assets are allocated to sovereign and investment grade, high yield, and emerging markets bonds, developed and emerging markets listed equities, private equity, infrastructure, and property. The latter asset class is predominantly domestic, including direct asset ownership. Overseas property is accessed via pooled funds.
AP Pension is a member of the Institutional Investors Group on Climate Change (IIGCC) and has therefore committed to reach net-zero by 2050. Its interim goals for 2030 are for a 41% reduction in CO2 invested per DKK million for equities and corporate bonds, and a 70% reduction for the operational emissions of the property portfolio.
As part of this commitment AP Pension sets investability criteria for fossil fuel companies, which are not systematically excluded from the portfolio. For instance, companies deriving more than 5% of revenues from, or having expansion plans in thermal coal or tar sands extraction will be excluded. A higher level of tolerance is applied to companies using thermal coal as part of their energy mix. Overall, unlike some of its Danish peers AP Pensions takes a more pragmatic view of the oil and gas sector, which it believes remains a necessary component of the energy mix during the net-zero transition period. For example, despite the IEA’s 2050 Net-Zero 250 scenario prohibiting any new extraction projects, AA Pension prefers to retain its holdings provided the investee companies can show credible evidence of real transition efforts. AP Pension publishes a list of excluded and watch-list companies on its website. Exclusion criteria for corporates and sovereign states also pertain to controversial weapons, tobacco, human rights, and governance.
Beyond exclusion, AP Pension also seeks to actively direct investments towards greener companies. It aims to have at least 18% of the portfolio in greens investments by 2025, and 25% by 2030. These include renewable energy projects and green bonds, as well as efforts to ensure environmental certification for its new-build property investments.
In the aftermath of the Kunming-Montreal Global Biodiversity Framework, AP Pension implanted a new Nature and biodiversity strategy in 2023. This has begun with a focus on land use, with the aim of engaging with portfolio companies over matters of deforestation and detrimental industrial agriculture practices. In December 2024 AP Pension’s property subsidiary announced a joint-venture project with PensionDanmark Property and the Planetary Responsibility Foundation to create a common biodiversity impact framework for the Danish construction sector. Funding from the three parties was supplemented by a philanthropic grant from local fund RealDania.