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Denmark’s PFA provides life, health and pensions insurance to 1.3 million customers. Having been formed as far back as 1917, its growth led to the creation of a separate, wholly owned subsidiary asset management firm in 2010. PFA Asset Management now serves as asset manager, advisor, and administrator for all the PFA Group’s assets.
PFA considers sustainability risks as an integral part of its overall investment process. ESG factors are incorporated both from a responsible investor standpoint and with risk/return considerations in mind. At the base level, PFA screens its portfolio for controversial weapons activities or breaches of international norms. This is done through Morningstar | Sustainalytics and PFA publishes the resulting exclusion lists on its website. Nevertheless, PFA prefers to actively engage with problematic investee companies and only divests as a last resort.
PFA’s climate investing policy is founded on a 2050 net-zero goal, with a 29% interim reduction target for 2025 from a 2019 baseline. It has highly ambitious targets for a sub-set of Climate Plus products, which aim for net-zero by 2025 and carbon negativity by 2030. PFA has had its climate targets validated by the Science Based Targets initiative (SBTi), having subscribed to the organisation in February 2024.
PFA’s active ownership policy has led to its deep involvement in numerous collaborative initiatives and international frameworks. These include Climate Action 100+ and Nature Action 100. As well as being a signatory of the PRI, the UN Global Compact, CDP, and SBTi, it is also a member of the Institutional Investors Group on Climate Change (IIGCC), the UN-convened Net-Zero Asset Owner Alliance (NZAOA), and the Ocean Plastic Forum.
Carbon reduction targets are coupled with a proactive policy of seeking out green investments. PFA invests in green bonds, offshore wind farm projects, solar energy and, as a member of the Global Real Estate Sustainability Benchmark (GRESB) and the Green Building Council of Denmark has supported innovative construction projects aimed at reducing the environmental footprint of the building sector. These include the flagship 20-storey TRÆ (WOOD) office building which will be Denmark’s tallest building with load-bearing timber structures. It also features recycled materials used on the facades and other non-load-bearing structures.
PFA has been ramping up its response to the global biodiversity crisis and the 2022 Kunming-Montreal Global Biodiversity Framework (GBF). Having signed the UNEP and PRI supported Moving on Nature Together statement PFA has committed to steering its investment towards alignment with the GBF goal of protecting 30% of the planetary surface by 2030. This involves the integration of new nature-related data and metrics within the investment process and incorporating biodiversity themes into its stewardship process, with a particular focus on those investee companies having the greatest impact on nature. PFA also seeks sustainability certification for its forestry investments, which it considers a positive contributor as a nature-based solution to both the biodiversity and climate crises.
PFA’s Climate Plus range offers its customers a more aggressive approach to climate investing, with full exclusion of the fossil sector and overall emissions 74% lower than the global equity benchmark index. Sustainability criteria are also fundamental to PFA’s alternative and unlisted investments, with which it seeks to produce direct and measurable positive impacts.