Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Gender Equality
• Responsible Investment
• Healthcare & Prevention
• Supplementary Training
• Active Ownership

Environmental Achievements

• Reduced carbon footprint of listed equity portfolio by 6,000 tonnes of CO2e despite portfolio growth.
• Reduced CO2 footprint of private equity portfolio to 4.1 tonnes/DKKm from 5.9 in 2019.
• Avoided emissions from ownership of green infrastructure estimated at >2,000,000 tonnes of CO2.

Social Achievements

• Increased proportion of women managers to 44.3% (from 33% in 2016).
• Expanded healthcare programme to include 600 physiotherapy and chiropractic clinics.
• 47,906 supplementary training programmes completed by members (increase of 6% from 2019).

Governance Achievements

• Disclosed voting policy at general meetings.
• Engaged in 632 dialogues with 385 companies for active ownership.
• Progress on 307 milestones in companies where PensionDanmark is invested.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to COVID-19.
• Difficulty in navigating the adult vocational and supplementary training system for members.
• Decreasing CO2 savings from green infrastructure due to improvements in fossil fuel energy production.
• Balancing attractive returns from Chinese investments with social responsibility concerns.
• Shorter lifespan of recycled materials used in real estate construction.

Mitigation Strategies

• Implemented digital solutions and personal advisory services to maintain high service levels during lockdown.
• Developed a supplementary training site with personalized overviews for members.
• Set a target of producing annual savings of at least 2,000,000 tonnes of CO2 from green infrastructure.
• Engaged in dialogues with Chinese companies on working conditions and human rights.
• Committed to using recycled materials with the longest possible lifespans in real estate projects.

Supply Chain Management

Responsible Procurement

• Compliance with UN Global Compact principles.
• Deselection of suppliers failing to respect labor rights and environmental standards.

Climate-Related Risks & Opportunities

Opportunities

• Investments in renewable energy and sustainable companies.

Reporting Standards

Frameworks Used: UN Sustainable Development Goals (SDGs), UN Global Compact, Principles for Responsible Investment (PRI), OECD’s Responsible Business Conduct for Institutional Investors, Paris Agreement, Danish sustainability indicators defined by Statistics Denmark and the 2030 Panel

Third-party Assurance: EY Godkendt Revisionspartnerselskab (limited assurance)

UN Sustainable Development Goals

• SDG 3 (Good Health and Well-being)
• SDG 4 (Quality Education)
• SDG 5 (Gender Equality)
• SDG 7 (Affordable and Clean Energy)
• SDG 8 (Decent Work and Economic Growth)
• SDG 11 (Sustainable Cities and Communities)
• SDG 13 (Climate Action)
• SDG 16 (Peace, Justice and Strong Institutions)
• SDG 17 (Partnerships for the Goals)

PensionDanmark's initiatives in healthcare, supplementary training, responsible investment, and active ownership contribute to these goals.

Awards & Recognition

• European Pension Fund of the Year (IPE Awards 2020)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Social Responsibility
• Governance

Environmental Achievements

• Reduced carbon footprint of listed equity portfolio by 18% since 2019
• 38.6% of PensionDanmark's real estate investments are aligned with EU sustainability criteria
• Reduced total carbon footprint per sqm from Danish properties to 8.9 kg in 2021 from 11.6 kg in 2020
• Invested DKK 12.1 billion in green energy production and committed to invest an additional DKK 11.3 billion

Social Achievements

• Launched online consultations with a psychologist for members
• Established a new green partnership with the Jutland Craftsmen School (DjH)
• Formed a partnership with 3F and the Danish Cancer Society concerning an employment retention project for members with cancer
• Formed a public-private partnership with the Municipality of Herlev for eldercare facilities
• Developed a new standardised ferry solution for Denmark’s small islands

Governance Achievements

• Migrated entire insurance administration to a new cloud-based IT platform
• Won several awards including IPE Award for best Danish pension fund
• Improved ESG ratio data basis by including measurements for additional activities (purchases, commuting and remote working)

Climate Goals & Targets

Environmental Challenges

• Measuring the impact of core business activities lacking standard units of measure
• Difficulty comparing reduction targets for greenhouse gas emissions based on different benchmarks
• Potential for Disclosure Regulation to impede sustainable development by excluding investments in developing countries
• Lack of competent labor in green jobs
• Inequality in education leading to unequal opportunities for education
• Members’ health – who is responsible?
• Climate protection vs. investment returns

Mitigation Strategies

• Constantly striving to report as specifically as possible and improve reporting
• Redefined reduction targets based on Net-Zero Asset Owner Alliance recommendations
• Investing in developing countries through blended finance
• Launched a two-year project to improve supplementary training framework
• Proactively reaching out to members with personalized advice and preventive healthcare
• Investing in visionary and progressive companies that support the green transition, including companies in the fossil fuel industry
• Implementing tools and initiatives to systematize active ownership approach

Supply Chain Management

Responsible Procurement

• Clearly defined standards for all suppliers, complying with the ten principles of the UN Global Compact

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products
• Investments in renewable energy and green technologies

Reporting Standards

Frameworks Used: UN Sustainable Development Goals (SDGs), EU Taxonomy, EU Disclosure Regulation, Insurance & Pension Denmark’s industry recommendations for climate reporting

Third-party Assurance: EY Godkendt Revisionspartnerselskab (limited assurance)

UN Sustainable Development Goals

• Goal 1
• Goal 3
• Goal 4
• Goal 7
• Goal 8
• Goal 11
• Goal 12
• Goal 13
• Goal 17

The report discusses the contribution of the business towards the SDGs.

Sustainable Products & Innovation

• Sustainable housing model
• Standardized island ferries
• Modular buildings with pre-installed furniture

Awards & Recognition

• Pension Fund of the Year at the Sustainable Investment Awards 2021
• Best Digital Customer Solutions award at the Digital Finans Awards 2021
• Best Danish Pension Fund at the IPE Awards 2021
• Nordic Investor of the Year and Value-added Strategy awards at the IPE Real Estate Global Awards
• Project Development Award at the Building Awards 2021

Environmental Metrics

ESG Focus Areas

• Climate Change
• Labour Rights
• Gender Diversity
• Biodiversity
• National Security

Environmental Achievements

• Reduced carbon footprint of real estate portfolio from 8.9 kg to 7.7 kg per sqm (achieving 2025 target)
• Green investments totalled almost DKK 35 billion, with DKK 14.3 billion in green infrastructure (18% year-on-year increase)
• Avoided emissions from ownership of green infrastructure: 1,309,478 tonnes of CO2
• 18% reduction in carbon emissions from offices in 2022
• 254 MW of new green power capacity became operational in 2022

Social Achievements

• 71,000 members used the healthcare programme (97% satisfaction rating)
• 39,744 supplementary training programmes completed
• DKK 55.7 million in supplementary training grants paid out
• Launched a new biodiversity strategy committing to positive contribution to biodiversity by 2030 in all urban areas and new construction projects
• Developed a gender diversity code for the construction industry

Governance Achievements

• 30% women on the Board of Directors
• Active ownership dialogues with 347 companies, achieving progress on 341 milestones
• 82% of votes aligned with board recommendations at general meetings

Climate Goals & Targets

Environmental Challenges

• Negative investment returns in 2022 due to market volatility and inflation
• Supply chain disruptions
• Energy crisis and dependence on Russian gas
• Need to balance climate objectives with robust returns for members
• Ambiguities in EU Taxonomy regarding classification of building projects on polluted land
• Lack of common methodology for measuring climate footprint of green bonds
• Data limitations and inconsistencies in ESG reporting

Mitigation Strategies

• Divested all Russian investments
• Offered psychological counselling to members with Ukraine relations
• Increased focus on green investments to reduce dependence on Russian energy
• Committed to funding defence investments
• Developed models to identify utility companies and oil & gas companies committed to low-carbon transition
• Active ownership engagement with companies to improve sustainability efforts
• Developed methods for measuring biodiversity impact of real estate projects
• Developed a sustainable procurement policy
• Implemented various sustainability initiatives at offices (e.g., energy-efficient lighting, window seals)

Supply Chain Management

Responsible Procurement

• Sustainability dialogues with suppliers
• Sustainable procurement policy

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Investments in renewable energy and green infrastructure

Reporting Standards

Frameworks Used: UN Sustainable Development Goals (SDGs), UN Global Compact, EU Taxonomy, TCFD, GHG Protocol, DGNB, OECD Guidelines for Multinational Enterprises, UN Guiding Principles on Business and Human Rights

Certifications: DGNB Gold, DGNB Diamond (Balancen project)

Third-party Assurance: EY Godkendt Revisionspartnerselskab

UN Sustainable Development Goals

• SDG 1
• SDG 3
• SDG 4
• SDG 7
• SDG 11
• SDG 13
• SDG 17

Investments in green infrastructure, healthcare, lifelong learning, and sustainable real estate contribute to these goals.

Sustainable Products & Innovation

• Virke housing concept
• Livsstilsbolig Pleje (lifestyle care homes)

Awards & Recognition

• EJENDOM2022 Sustainability Award
• IPE Real Estate Awards Value-added Strategy Award
• ESG/SRI Provider of the Year award