Denmark’s pension provider AP Pension has developed a climate report in line with the Task force on Climate-related Financial Disclosures (TCFD) recommendations as the first commercial pension company in Denmark.
The report is based on an analysis of the companies in which AP Pension has voting rights and the opportunity to potentially divest from. Collectively, this covers an investment universe of around 300 individual companies at a market value of DKK 22.3bn.
The companies covered by the report and who publish their CO2 emissions leave AP Pension’s total portfolio with a 50 per cent lower footprint than the benchmark. About 14 per cent of the energy use in the portfolio is through green energy, which is higher than the 10 per cent bench mark.
In the report, AP Pension said that the TCFD recommendations are not fully satisfied due to a lack of strategy or policy in that area. However, the gaps can be filled for next year’s report, with action on the various areas to ensure a complete adherence to the TCFD.
Commenting, AP Pension CIO Ralf Magnussen said the scheme has taken two specific steps in the past year for a more responsible investment process – an increased use of active ownership and increased transparency in relation to investments.
“The TCFD report means that we raise the transparency of our investment portfolio to a new level while we the same time as we get a more coherent information framework,” Magnussen said.
AP Pension said the report will allow for a better understanding of the investments’ effect on the climate and show how it lines up with the Paris Agreement from COP21 in 2015.
“We are very aware of the responsibility we have been given when administrating our members’ pension savings. Going forward we expect that the report will give us a better understanding of the climate effect of our investment portfolio and how it is compatible with the Paris Agreement.
“As long as the outcome is measured to be attractive, it is our ambition to constantly increase our investments in renewable energy, while we support responsible behaviour in the companies that are part of our investment portfolio.”
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