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3 Nordic Pension Funds First to Have Climate Targets Approved

Three Nordic pension companies are the first pension funds in the world to have their climate targets approved by the Science Based Targets initiative.

The $20 billion AkademikerPension, Gentofte, Denmark, the $44 billion PensionDanmark, Copenhagen, and Varma Mutual Pension Insurance Co., Helsinki, earned recognition from SBTi in recent days.

The Science Based Targets initiative is a partnership between several climate disclosure organizations that validates and approves climate goals if they are based on a scientific method and meet the Paris Agreement’s goal of limiting the global temperature rise to 1.5 degrees. Approval requires companies to reduce CO2 emissions from their own operations and energy supply (Scope 1+2) and to ensure reductions in the entire value chain, including sub-suppliers and customers (Scope 3).

For pension funds, Scope 3 includes the proportionate share of emissions from companies the funds are invested in.

SBTi “is probably the most important organization in the world” when it comes to validating whether companies’ climate plans support the Paris Agreement’s goal of keeping global warming to a maximum of 1.5 degrees, AkademikerPension said in a statement.

“We want to do our utmost for the green transition, to take care of the climate and our members’ pension savings, and this validation of our new climate goals confirms that we are on the right track,” investment director Anders Schelde said in the statement.

AkademikerPension’s climate targets include increasing the share of green investments by 2030 and reducing financed CO2 emissions from the companies it holds by 26.8% in 2025 across all asset classes, goals that are backed by the Net-Zero Asset Owner Alliance.

“The goals really show how extremely fast the green transition has to go,” Schelde said.

Varma aims to cut emissions from its own operations, including the real estate portfolio, by 60% from 2021 levels by 2030, and increase the share of companies in listed equities, corporate bonds and real estate funds committed to SBTi goals to 51% by 2027. Those asset classes make up 45% of Varma’s €57.4 billion investment portfolio.

“We want to be sure that our targets are aligned with international climate agreements,” Hanna Kaskela, senior vice president of sustainability and communications, said in a separate statement. With 98% of overall emissions related to holdings, “reducing indirect emissions is very important,” she said.

PensionDanmark’s target is to have more than half of total investments in listed shares and corporate bonds invested in companies with validated science-based targets by 2027.

SBTi is developing the first science-based global standard for financial sector net-zero targets consistent with achieving a net-zero world by 2050. The Financial Institution Net-Zero Standard is scheduled for release by early 2024.

Source : Pensions & Investments

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