Danica Pension tightens the requirements for fossil companies

7 March 2024

Danica Pension publishes on its website:

We are now introducing stricter requirements in the climate area for fossil companies. Going forward, we will only invest in fossil fuel companies with climate plans that enable them to comply with the Paris Agreement.

At Danica Pension, our ambition is to have CO 2 -neutral investments by 2050 at the latest in order to both future-proof our customers’ investments and support the Paris Agreement’s goal of slowing global warming to 1.5 degrees. Therefore, for example, we are in the process of reducing CO 2 emissions from investments in five sectors and investing DKK 100 billion in the green transition.

Now we are taking another step by setting stricter climate requirements that fossil companies must meet in order for us to invest in them. This means that in future we will only invest in companies that have realistic plans to adapt in accordance with the goals of the Paris Agreement. If a company does not meet our requirements, it is placed on the exclusion list and we do not invest in them.

The companies’ climate plans will be assessed based on a model based on the recognized climate assessment tool Transition Pathway Initiative (TPI) as well as other science-based data sources. This gives us a factual basis for assessing the companies’ climate performance and whether they are on the right course in terms of complying with our requirements and the Paris Agreement.

“Today we have quite a few billions invested in fossil companies, and in comparison we have invested DKK 55.4 billion in green transition. Our investment strategy is tied to the fact that we believe that green transition and strong returns for customers go hand in hand in hand,” says Dorte Eckhoff, head of sustainability at Danica Pension and elaborates:

“Transforming the energy system is complicated and full of dilemmas. But it is also necessary, and we want to play a role in the transition. With the new approach, we can target investments to companies with robust climate plans and focus our active ownership. At the same time, we can better handle the risks and opportunities that arise in the green transition in order to ultimately take care of the customers’ pension investments.”

At COP28, world leaders committed to phasing out fossil fuels from the energy system, and we can support that goal even more with the stricter requirements and a more focused portfolio of fossil companies. At the same time, we will gradually phase out investments in fossil companies as the world economy phases out fossil fuels.

The new approach will be implemented during 2024.

Source: Danica Pension
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