The reporting of Danish pension companies’ CO2 footprint is “so variable in terms of assumptions and limitations that it is often difficult" to assess if pension companies are on the right track, according to research by AnsvarligFremtid (ResponsibleFuture).

ResponsibleFuture compared 14 Danish pension companies’ CO2 footprints (scope 1 and 2) from their investments in listed shares and corporate bonds over the period 2019-2022. The analysis intends to provide insight into which Danish pension companies are on track to meet their own CO2 reduction targets by 2025 and the goal of reaching net zero in the year 2050.

The analysis is based on data for scope 1 and 2 emissions that the pension companies have published as part of their climate reporting for the year 2022, or on data that they have provided separately to ResponsibleFuture. However, the campaign group said it struggled to make comparisons due to data variability.

“Although pension companies report the CO2 footprint of their investments in accordance with the same industry guidelines, the companies' reporting is still so variable in terms of assumptions and limitations that it is often difficult to assess whether the pension companies are on the right track to offset the companies' own CO2 reduction target," ResponsibleFuture's report stated.

ResponsibleFuture was able to collect comparable data for a total of 12 pension companies, but was unable to obtain information from PFA‘s and PKA’s CO2 footprint linked solely to the companies' listed share and bond investments.

In response to this, PFA COO Rasmus Bessing, said: "We already report separately for shares, bonds and properties, and we report according to the industry standard. Our ambition is to cover as large a part of our assets as possible, and we have done more than many others. In addition to listed shares and credit bonds, we also include properties and infrastructure. The goal is to show a path to net-zero for the entire portfolio.”

In addition, PKA deputy executive director of ESG, Policy and International Affairs, Dewi Dylander, said: "PKA is currently shifting data supplier, but, as can be seen from the graph, PKA has both in the previous years and can again at the end of 2023 provide the requested figures divided into the different asset classes."

However, with the collected data ResponsibleFuture was able to make the following comparisons. Lærnernes Pension and Akademikerpension in 2019 had a CO2 emission from their portfolio of shares and corporate bonds, which was twice as high as the pension companies with the lowest CO2 footprints.

“It is noteworthy that some companies already today seem to be able to easily achieve their CO2 reduction targets for 2025. Correspondingly, there are a number of companies which will have to make very large CO2 reductions in order to be said to be on the right track towards the goal of net-zero in 2050,” ResponsibleFuture noted.

“For the pension companies that continue to have a high CO2 footprint despite the fact that they have already achieved large reductions, this means that all things being equal, with a ‘CO2-heavy portfolio’ there is a greater risk of financial losses as climate policy regulation and increased competition from companies with a lower CO2 footprint challenge the competitiveness of high-emitting companies.”

However, in response Akademikerpension CIO Anders Schelde, has criticised the study by ResponsibleFuture for not looking at all CO2 emissions: "It makes no sense to only look at a small part of the portfolio companies' emissions. And the comparison gives a completely wrong and distorted picture of reality. The study from AnsvarligFremtid only includes scope 1+2, despite the fact that the largest emissions are in scope 3."

European Pensions has contacted PKA and Lærnernes Pension for a response.

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