Denmark’s AkademikerPension has raised its CO₂ reduction target to 65 per cent by 2030 after already exceeding its 2025 interim goal, having cut portfolio emissions by 51 per cent since 2019.

The pension fund has a long-term target of being climate-neutral by 2050 at the latest.

Its previous target, set for the end of 2025, was to reduce its portfolio’s CO2 emissions by 26.8 per cent. This was exceeded, partly due to its divestment of fossil fuel investments.

Alongside this, AkademikerPension increased the proportion of climate-related investments in its portfolio and set clear requirements for its investee companies to establish science-based climate targets.

Commenting, AkademikerPension chief investment officer, Anders Schelde, said: “We want to do our utmost to support the green transition, to protect the climate and our members’ pension savings, and our reduction between 2019 and 2025 confirms that we are on exactly the right track.”

In addition to its new 2030 target, the pension fund has introduced a transition target that shifts the focus from the composition of the portfolio to the companies’ actual transition.

Its aim is that by 2030, at least 10 per cent of the most greenhouse gas-intensive assets in its portfolio will be brought into line with the Paris Agreement through active ownership, dialogue and clear expectations regarding transition plans.

AkademikerPension said these companies are where the transition is “most complex”. Therefore, it believes that targeted efforts can make the greatest difference to both the climate and long-term risk.

Furthermore, the pension fund stressed that its work on CO2 reduction is as much about returns as it is about combating climate change. It believes that the green transition will make many fossil fuel companies unattractive in the future, which will pose significant long-term risks to returns.

The DKK 164bn pension fund believes it has the “financial clout” to work alongside other institutional investors to encourage major CO₂ emitters to change their approach to climate action.

“As I said, we continue to see significant risks to returns in fossil fuel companies that lack a robust green transition plan. At the same time, we find it virtually impossible to get the management of these companies to listen. But as a responsible investor, we will continue to press the issue,” Schelde concluded.

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