Even though 2050 is more than 20 years away, decisive action is required already today and Alliance Members have to set a range of interim targets for their engagement efforts and investment strategies by 2030 that can produce the required change to be well on track towards a carbon neutral economy.
As a member of the Net-Zero Asset Owner Alliance, PensionDanmark have in our capacity as investor, endorsed working towards a world economy with Net-Zero Green House Gas emissions before 2050 in line with the Paris Agreement. Measures to achieve this include active ownership and investments in climate-friendly technologies. In 2025 we have set new interim targets on the way to fulfilling our net-zero commitment; targets that are based on the Target Setting Protocol and require change well before 2050.
The interim targets include:
Sector targets
By 2030, we aim to reduce the production carbon intensity of our listed equities, within four main sectors:
- Shipping: 25% reduction in scope 1+2+3 intensity from a 2024 baseline
- Cement: 25% reduction in scope 1+2 intensity from a 2019 baseline
- Utilities: 60% reduction in scope 1+2+3 intensity from a 2019 baseline
- Oil & Gas: 15% reduction in scope 1+2+3 intensity from a 2019 baseline
The sector targets are developed with input from the One Earth Climate Model (OECM) and Transition Pathway Initiative (TPI) on sector pathways. The reduction target for oil & gas is below the outline from TPI, but must be interpreted carefully, since our exposure to the sector is anticipated to decline towards 2030. The exact decline will depend on the development in global energy markets.
PensionDanmark has two overall climate goals: Firstly, to have a well-diversified investment portfolio that produces satisfactory returns for our members with the lowest possible carbon footprint. Secondly, to invest in companies and projects that both fulfil our return expectations and embarks on a green transition or produce solutions to global climate challenges. Due to these goals, we have chosen to focus on sectors that account for a large part of our financed CO2 emissions. Companies in these sectors face demand for a green transition but the global economy depends on their production; hence the best strategy is to promote and invest in those companies that lead the green transition. With respect to oil & gas, there can be a need to downsize fossil activities and pay large cash holdings to their investors in the form of dividends.
Engagement targets
PensionDanmark has set engagement targets that include supporting collaborative and single engagements, backing Science Based Targets Initiative (SBTi) approved targets and net-zero commitments and contribute to consultation papers aimed at making a real-world change. For instance, PensionDanmark has committed to execute 25 bilateral engagements before 2030 as well as engaging with a minimum of 10 asset managers on climate change policies and practices as well as contributing to minimum 7 AOA-papers.
The Alliance is encouraging Asset Owners to drive real world impact through engagement with corporates, e.g. through CA100+, and policymakers. PensionDanmark engage in dialogue with authorities and other stakeholders regarding societal issues, particularly how private investors can become involved in creating new and innovative solutions.
Development of green infrastructure
By 2030, PensionDanmark aims to contribute to financing the construction of a total of 800 MW new capacity in renewable energy. Since the base year of 2021, PensionDanmark has financed construction of 559 MW of new capacity in renewable energy.
Investment in and deployment of renewable energy sources are an important part of our overall strategy to achieve climate goals and limit temperature increases. Over the past 15 years, PensionDanmark has invested heavily in renewable energy and green infrastructure. These types of investments directly address the opportunities inherent in increased demand for green energy sources, while reducing the overall climate footprint of our portfolio.
Sub-portfolio targets
By 2030, the climate footprint of our portfolios of listed equities and corporate bonds are to be reduced by 62% compared to 2018. For private equity, we have a target of reducing the climate footprint by 51% compared to 2019. For our real estate portfolio, we aim at reducing the carbon intensity by 42% compared to 2019.
The Alliance has recommended that its members should aim for a reduction of a minimum of 40-60% in the climate footprint of their portfolios before 2030. PensionDanmark has an ongoing focus on reducing our footprint across all our sub-portfolios as well as increasing our data coverage. In 2024, 90% of our investments were included in our CO2-accounting compared to 25% in 2019.