PensionDanmark has become one of the first pension companies to have its plans to reduce CO2 emissions in its investments approved by the Science Based Targets initiative (SBTi).

The SBTi is a partnership between the UN's Global Compact, World Resources Institute and the World Wide Fund for Nature (WWF). The initiative helps companies set ambitious reduction targets that are in line with the latest climate research, such as the goals of the Paris Agreement.

SBTi has validated PensionDanmark’s targets for the reduction of CO2 emissions in its investments across several asset classes, up to 2030. PensionDanmark is the only pension fund to have approved targets for investments in both properties and infrastructure up to 2030.

As part of the targets, by 2030 PensionDanmark will have an emission intensity of no more than 48 kg CO2e per megawatt hour for financed electricity supply projects in the period 2021-2030. An emission intensity of no more than 9 kg CO2e per square meter for financed property projects in the period 2021-2030.

Furthermore, in 2027, more than half of the total investments in listed shares and corporate bonds must be invested in companies that have validated science-based targets.

"It is a significant step that we now have SBTi's word that our short-term objectives are in line with the Paris Agreement. It is an important pressure test of our work to reduce and, in the long term, completely neutralise the climate footprint from the DKK 300bn, which our members have saved up," PensionDanmark head of ESG and sustainability, Jan Kæraa Rasmussen, said.

The approved objectives set a concrete ceiling on the maximum emission intensity for the operation of properties (kg/m2) and energy infrastructure (kg/MWh), respectively, in which PensionDanmark has investments. In addition, the validation also includes the objective of a 42 per cent reduction of scope 1 and scope 2 emissions of greenhouse gases from PensionDanmark's own operations from 2021 to 2030.

"The validation shows that we are on the right track, but we are not there yet. We must continue to follow up on the ambitious goals – also after 2030, so that we can reach the end goal of a CO2-neutral portfolio before 2050," Kæraa Rasmussen added.

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