Danica Pension ups ESG policy with more exclusions and tightening of coal restrictions

Danica Pension has strengthened its investment policy on investing in coal, tar sands and peat, as well as excluding a further 18 companies that are involved in criticisable activities.

The provider will no longer invest in companies where more than five per cent of revenue comes from coal, tar sands or peat, unless they have a clear phasing-out plan. This is part of its target to not invest in these forms of energy at all by 2040, with its previous limit being 30 per cent.

Recently, Danica Pension set goals to reduce CO 2 emissions for five key sectors as part of the ambition to have CO 2 -neutral investments by 2050.

“The energy sector is undergoing great change, and fossil energies are increasingly being replaced by green alternatives. The new restrictions help to support this development, and together with our climate initiatives, it is a clear signal that we are focusing on combating climate change and supporting the journey to a more climate-friendly society,” Danica Pension CEO, Ole Krogh Petersen, said.

“We are convinced that the future belongs to the companies that can adapt to a green future. Therefore, the stricter requirements help to secure customers' savings for the future, so that we can create a financially secure pension life for our customers.”

Danica Pension will still invest in companies with more a turnover of more than 5 per cent from coal if they have a credible climate plan and are taking steps to phase out coal activities. This is part of the provider’s focus on contributing to the Paris Agreement’s climate ambitions by pushing companies in the right direction.

“The road to a greener world does not only go through opting out of climate-damaging companies. It is at least as important that we use our muscles as an investor to influence companies to reduce their climate impact. By using the climate parameters of the Transition Pathway Initiative, we can objectively assess which companies are willing to change, and we can focus our dialogue on these companies,” Krogh Petersen said.

In addition, Danica Pension has excluded another 18 companies that are involved in criticisable activities and violate norms such as the principles of the UN Global Compact. Danica Pension, for example, has chosen to stop investing in Hikvision for human rights violations, based on the provision of technology used to monitor the Chinese people including the re-education camps where Uighurs are held captive.

It also no longer invests in Glencore on the basis of their involvement in a number of reprehensible activities such as corruption, use of child labour, water and air pollution and the extraction of more than 20 million tonnes of coal annually. It has also stopped investing in SLC Agricola, BRF & Minerva based on their involvement in deforestation of the Amazon.

Danica Pension's list of excluded companies now includes 790 companies, of which approximately 370 companies are excluded on the basis of tar sands and coal and over 200 companies based on breaches of standards.

    Share Story:

Recent Stories


Podcast: The benefits of private equity in pension fund portfolios
The outbreak of the Covid-19 pandemic, in which stock markets have seen increased volatility, combined with global low interest rates has led to alternative asset classes rising in popularity. Private equity is one of the top runners in this category, and for good reason.

In this podcast, Munich Private Equity Partners Managing Director, Christopher Bär, chats to European Pensions Editor, Natalie Tuck, about the benefits private equity investments can bring to pension fund portfolios and the best approach to take.

Podcast - The power of three: Using Common Contractual Funds to improve tax outcomes for investors
Large asset owners are still investing in equities in a way where they are taxed on their income. The implication is that they get a poorer return. They need to, and can, improve this, but how?

In this podcast, AMX Head of Client and Manager Development, Aaron Overy, and AMX Product Tax Specialist, Kevin Duggan, discuss with European Pensions Editor, Natalie Tuck, about three options to help ensure good withholding tax outcomes for institutional investors.

Mitigating risk
BNP Paribas Asset Management’s head of pension solutions, Julien Halfon, discusses equity hedging with Laura Blows