The Danish pension industry's investments in the green transition have reached DKK 343bn, Denmark’s Forsikring & Pension (F&P) has found.

F&P pointed out that, in 2019, the Danish pension industry was the first in the world to commit to investing an additional DKK 350bn in the green transition within sustainable energy by 2030, compared to the DKK 126bn already invested at the time.

F&P said that 2024 promises to be the warmest year ever, and in Denmark also the wettest, warning that climate change is a reality, and action must be taken to slow down the development.

The association noted that up until this point, the industry’s climate commitments had been based on the UN's Sustainable Development Goal Seven on sustainable energy.

However, as of 1 January 2024, the commitment was calculated according to the EU's new environmental taxonomy and the criteria for other climate and environment-related investments in the disclosure regulation.

Given this, the industry has set an updated conditional commitment of DKK 450bn by 2030.

Commenting on this, F&P CEO, Kent Damsgaard, said: “Throughout the many years of low interest rates, it was good for pension savers that their fortunes were invested in long-term green projects.

“In recent years, there have been significantly more headwinds for investments in, for example, wind turbines.

“This is due to higher interest rates and inflation, but also long approval times and political uncertainty about the framework for investing.

“Nevertheless, the industry has succeeded in increasing its investments worldwide, so that Danes' pension savings can continue to contribute to the green transition and at the same time secure money for old age.”

Damsgaard explained that so far, climate commitments have been based on the UN's Sustainable Development Goals on sustainable energy, but with the adoption of the EU's new environmental taxonomy, F&P believes it makes the most sense to measure investments based on the new common standard.

“In this connection, we have set the total target – according to the new yardstick – at DKK 450bn,” he continued.

“The industry has succeeded in increasing its investments worldwide so that Danes' pension savings can continue to contribute to the green transition and at the same time secure money for old age.

“As an industry, we have since 2019 chosen to take the lead in an area where the calculation methods must first be developed and the data basis provided.

“Since we first started calculating the green investments, both we and everyone else have become more precise on how to calculate and classify them.

“As we now move to a new calculation method based on the EU's taxonomy and the Disclosure Regulation, it will naturally be more difficult to compare one to one with previous years.

“But there is no doubt that things are going in the right direction, and there have been more investments in the green transition.”

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