Denmark’s Danica Pension has published a statement on its progress towards its target of net-zero carbon emissions by 2050, noting that it is ahead of schedule in certain sectors, while other sectors need to catch up.

It is ahead of its targets in supply and cement, and there is positive progress in the automotive and shipping industries, although the transition “is not strong enough” in energy, steel and aviation.

To meet its target schedule, the CO2 intensity of its investments must decrease by between 15 and 35 per cent in 2025 compared to 2019 levels.

As of 2022, the reduction of CO2 emissions in Danica Pension’s investments in energy was 3 per cent, with its target being 15 per cent by 2025.

Meanwhile, its steel investments have seen a reduction of 5 per cent as of 2022, while its aviation investments’ CO2 emissions have increased by 27 per cent.

Reductions in CO2 emissions in its supply and cement investments are already ahead of schedule, at 41 per cent and 25 per cent respectively.

The CO2 footprint from Danica’s total share and bond investments have fallen by 17.5 per cent from 2019 to 2022, while its CO2 emissions from property investments have fallen by 40 per cent.

Furthermore, Danica has almost quadrupled its investments in the green transition, from around DKK 10bn in 2019 to DKK 37bn in 2022.

"We have generally come back well and see the effects of having a close dialogue with the companies, which are in the process of delivering on their climate strategies and raising the bar,” commented Danica Pension managing director, Søren Lockwood.

“There is still a lot of work ahead of us, and we are dependent on companies adopting new green technologies.

“The CO2 reductions will fluctuate over time, but we have laid out a clear strategy to be able to meet the targets, where active ownership and pressure on companies are our primary tools to cut the CO2 footprint and at the same time deliver attractive returns to customers.

"We will also assess how we can target investments to an even greater extent to the companies that are furthest along in the transition and increase investments in the green transition.

“At the same time, we can choose to sell companies that do not move quickly enough on the climate front over time, as we did with Exxon.”

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