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Tuesday 19 November 2019

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2022 goal for MP Pension to invest DKK 12bn in climate-friendly investments

Written by Natalie Tuck
03/10/19

Denmark’s MP Pension now has around DKK 7.2bn invested in green and climate-friendly investments, and it aims to invest DKK 12bn by 2022.

Around DKK 3.3bn of this is invested in the fund’s special climate pool, with the remainder invested in other portfolios. MP Pension intends to build up its climate pool by 2022 so that it accounts for 5 per cent of total investment. By this time, MP Pension will have DKK 10-12bn, depending on the exchange rate developments.

Recently, MP Pension sold all of its investments in the world's 10 largest oil and gas companies. The fund said it did this for financial reasons and because it felt it had a responsibility to do so. It said that by taking money out of oil and gas investments and instead investing in green companies, it is contributing to the green transition that the pensions industry committed to.

MP Pension investment manager, Anders Schelde, said that some people think the fund’s green transition will cost its returns, but “the opposite is true”.
“The transition is huge and it offers lots of exciting investment opportunities, so the investments we have made in green and climate-friendly companies help ensure risk diversification, and a high return for our members,” he said.

The fund’s latest investment is DKK 150m in a fund expanding green energy in developing countries. The fund is managed by Copenhagen Infrastructure Partners.

"Green conversion is important in Denmark, but even more important in the less developed countries. Energy demand will grow even faster in the future, and in these markets they are now very dependent on fossil energy. Unfortunately, especially coal, which is the worst black energy source,” Schelde said.

"But many developing countries will need a large expansion of new energy sources in the future, so there will be great appetite for both green and climate-friendly solutions at the right price. This makes the fund interesting for us, because in that way we can be helps to secure our goal that accountability and good returns go hand in hand.”



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