Danish fund to track CO2, may exclude some firms from portfolio
COPENHAGEN – Denmark's biggest commercial pension fund will soon track carbon emissions by companies it invests in, and exclude those it finds breach the Paris climate accord, its CFO told Reuters.
PFA, which provides pensions for 1.2-million Danes and has assets of $95-billion, is the latest investor to push the issue of climate change up its agenda.
Sweden's largest national pension fund, AP7, sold its holdings in six firms it said violated the Paris agreement in June, while Norway's sovereign wealth fund is asking the banks it has invested in to disclose how their lending contributes to greenhouse gas emissions.
Last year PFA added an obligation to its policy for responsible investments that it should not invest in companies which obstruct the Paris agreement.
The pension fund has hired Swedish consultancy firm GES to help it develop a method to screen the hundreds of companies it has investments in from its $16-billion stock portfolio.
"In the last 12 months we have made a big effort to find out the data and the method to measure the carbon emissions in our stock portfolio," Anders Damgaard told Reuters.
"I hope we'll be done this year."
Damgaard also said the fund was also reviewing whether it could match the returns from the four sectors which contribute more than 80% of the carbon emissions in its portfolio, from alternative investments.
Energy, industrials, utilities and materials are responsible for the bulk of its emissions at present.
"We have to consider whether we could get the yield we get from those sectors from companies in other sectors instead," Damgaard said.
While the Paris climate deal is an agreement between nations, some investors have used it as a tool to pressure the companies they invest in to lower their emissions.
So far the Danish fund has not excluded any companies for not complying, but that will likely change once the pension fund has worked out a system, Damgaard said.
"I believe that will come, but we have to set up a process and some clear criteria for how to identify those companies. And that work is still ongoing," he said.
He said the new tool should also be used to identify which sectors to invest in in order to keep carbon emissions within PFA's "fair share".
Comments
The
content
you are trying to access is only available to subscribers.
If you are already a subscriber, you can Login Here.
If you are not a subscriber, you can subscribe now, by selecting one of the below options.
For more information or assistance, please contact us at subscriptions@creamermedia.co.za.
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation