By Sarah Rundell

Investors from Schroders, Trillium and PensionDanmark discuss how a changing regulatory picture and the economics of sustainable investment are coming together to create a tipping point in ESG, but they warn their peers to look beyond the label to what is on the inside.

In keeping with being one of the first investors in wind energy years ago, Denmark’s PensionDanmark was also an original investor in the country’s state of the art energy island in the North Sea. Matching the energy output of 25 traditional wind farms, the island is one of two recently ratified by Parliament with the promise of transforming Europe’s energy sector.

“We are on the brink of the next step in offshore wind development,” enthused Torben Möger Pedersen, chief executive of Denmark’s PensionDanmark speaking at ‘Sustainability Digital: A Planet in Trouble.’

“I encourage colleagues in the pension fund industry to be aware,” he said, espousing the risk-adjusted returns that will come from investing in the pioneering infrastructure that connects to the grid and will see green power integrated into transport systems.

In a panel session chaired by PRI’s chief executive Fiona Reynolds, Pedersen also highlighted the investor opportunity in the EU’s giant €750 billion stimulus plan, around 30 per cent of which will go towards green endeavour. “Thirty per cent is linked to investments in the green transition and climate-related projects. Most of them will be a source of interest to private investors,” he predicted, adding that the pension fund has been involved with the EU on shaping the taxonomy that will introduce common standards on ESG and which is designed to stop green washing.

Elsewhere he said the pension fund is focused on engagement over divestment and is a proud founding partner of the Asset Owner Alliance under which it targets a carbon neutral portfolio by 2025. “Members of the Alliance have reduced their carbon footprint. If you can’t fulfil targets, you can’t be a member.”

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