Insurance and Pension Denmark has replaced its existing model to calculate the pension industry’s green investments with a new one that is in line with European legislation and standards.

Going forward, the pension industry's climate commitments will be calculated according to the EU's environmental taxonomy and disclosure regulation. The Danish pension industry has calculated its green investments since 2019 when the entire industry made a conditional commitment to increase their green investments by billions.

“When our industry made the Green Commitment in 2019, it was the first pension industry in the world. The taxonomy didn't exist, so for the past few years we have used the UN Sustainable Development Goal 7 on sustainable energy as a basis for reporting. But now that the taxonomy is fully implemented, it will be an important part of a new reporting model,” I&P Denmark deputy director, Tom Vile Jensen, said.

The model also takes article 2.17 of the disclosure regulation into account. The disclosure regulation, which stems from the EU Green Deal, deals with requirements for financial companies' ESG disclosures and is closely related to the taxonomy. However, the regulation provides a broader framework for what can be counted as a sustainable investment.

“We now have a model that stands on European legislation and standards. This increases transparency and uniformity considerably, even though climate and environmental targets will always be subject to different interpretations. But our model is based on the best scale available, and we will continuously adjust if necessary," Vile Jensen said.

He also said that the upcoming investment statement cannot be compared with previous years.

“There is a big difference between the taxonomy and the disclosure regulation on the one hand and UN Sustainable Development Goal 7 on the other. The new model is therefore different from the one we have previously used. Therefore, we cannot compare the new figures with the figures we have reported in previous years. But this does not change our commitment and that we are committed to continuously measuring our investments in the area," Vile Jensen explained.

He also said that the first two years of the new reporting model will only report on the first two goals in the taxonomy that deal with climate. The last four environmental goals in the taxonomy will be reported by companies for 2026 onwards.

The first figures according to the new calculation model are scheduled to be available in Q3 2024.

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