Peter Damgaard Jensen, Chair of IIGCC and CEO of PKA, discusses climate investment, collaboration, and the recent $50 billion dollar commitment to global green investments made by the Danish pension funds represented by Insurance & Pension Denmark.
What began PKA's commitment to sustainable investing?
First of all, sustainable investments are important to our members. PKA’s efforts to invest responsibly are therefore about the ability to maximize the amount our members will have in retirement at the same time as making sure they retire into a sustainable economy, society, and environment.
PKA has been an active investor in sustainable investments for a number of years. In 2011, PKA made its first sustainable investment in an off-shore wind farm, which became a good learning experience. Since then we have invested in several on- and offshore wind farms as well as solar parks, biomass plants, and sustainable buildings in Europe and the United States. Today, PKA has invested USD $4 billion or about 10% of our funds in sustainable investments.
How did the recent commitment of $50 billion USD from the Danish pension funds towards global green investments come about? What was needed to realise this commitment, and how did collaboration support this?
In recent years, awareness of pension funds’ ability to impact companies and fuel the green transition has been growing. Pension funds have the scale to act — pension funds in the OECD countries alone manage assets for more than USD 42.5 trillion for their members.
As a result, PKA and many other Danish pension funds are divesting from fossil fuels and are increasingly investing in green renewable energy. Today, Danish pension funds invest five times more in renewable energy than other kinds of energy.
Danish pension funds’ rising awareness and interest for green investments made the Danish Government reach out to IIGCC about making a common commitment for the sector. Through a collaboration with Insurance & Pension Denmark, other pension funds were encouraged to participate. The initiative quickly took shape and soon we had a list of relevant and climate-conscious pensions funds that were willing to commit.
Collectively all the participating pension funds had already invested $19 billion USD in the green energy transition and were willing to commit to $50 billion USD by 2030.
In addition to serving as CEO of PKA, you are also the Chair of the Institutional Investors Group on Climate Change (IIGCC). How will IIGCC continue to build momentum for investment in climate change solutions following the Danish Pension Funds announcement?
One of the relevant initiatives led by IIGCC is the Paris-aligned Portfolio Initiative, which will enable pension funds and other institutional investors to align their portfolios with the Paris Agreement. Another relevant initiative is the IIGCC-driven Climate Action 100+ supported by more than 370 institutional investors representing more than $35 trillion USD.
In the future, IIGCC will continue to play a key role in international outreach to encourage additional institutional investors to make commitments to clean energy and climate-related investments.
What are your goals for World Climate Summit - The Investment COP in Madrid?
My goals for the World Climate Summit are to promote PKA and Danish pension funds’ ambition of financing the green transition with more than $50 billion USD by 2030 in order to attract more private sector commitments from around the world towards clean energy and climate-related investments.