COP26: Nordic and UK pension funds commit £95bn to climate investments

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Nordic and UK pension funds plan to allocate £95bn towards clean energy and climate investments by 2030.

The commitment was announced at COP26 in Glasgow by CEOs of Nordic and UK pension funds that are part of the international public-private sector initiative Climate Investment Coalition (CIC) which will report on the progress annually.

Mette Frederiksen, Prime Minister of Denmark, said: ‘In 2019, Danish pension funds committed to invest $55bn in the green transition by 2030. I am proud that we have inspired others and that Nordic and UK pension funds are now ready to invest $130bn in total by 2030.’

Some of the 2021 commitments include investments in listed and unlisted equity, green energy infrastructure in OECD and emerging markets, green bonds and debt, and climate-friendly investments.

Sverre Thornes, CEO, KLP (Norway) said in addition to a science-based decarbonisation of the portfolio, the pension fund has committed to invest €600m each year in climate solutions such as renewable energy.

‘We focus on developing partnerships that not only create attractive investments for KLP, but also allow other investors to scale up their level of climate friendly investments,’ Thornes added.

Risto Murto, CEO of Varma Mutual Pension Insurance Company, said the Finnish firm has begun to track its climate allocation in 2019, which can include green bonds, companies that derive a significant portion of their revenue from cleantech, and buildings that are operating 100% with emission-free electricity and heating.

Varma’s target is to reach a 20% climate allocation by 2025.

‘Our goal is to influence, together with other investors, how fund managers take climate perspectives into account in their operations. We also actively highlight the fact that preparing for climate change offers significant investment opportunities,’ Murto added.

Mark Fawcett, CIO of Nest, said the institutional investor is taking immediate steps to reduce its portfolio’s carbon footprint and halve its emissions by 2030.

‘This includes a commitment to invest billions of pounds into renewable infrastructure over the coming decades. We want to give Nest members a bigger pension in a better world and helping to tackle climate change is a key part of that.’

Committing pension funds in 2021 include: Almenni Pension Fund, ATP, Bank Employees’ Pension Fund, The Pension Fund for Reykjavík City Employees, Birta Pension Fund, Brú Pension Fund, Environment Agency Pension Fund, Festa Pension Fund, Frjálsi Pension Fund, Gildi Pension Fund, Greater Manchester Pension Fund, Ilmarinen, KLP, Lifsverk Pension Fund, Lív Group, LSR – Icelandic Pension Fund for State Employees, Merseyside Pension Fund, Nest Pension, Pension Fund of Commerce, Skandia, SL The General Pension Fund, SPP, Stapi Pension Fund, Storebrand Group, and Varma Mutual Pension Insurance Company.

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