Six Danish pension funds that have €32bn in assets and insure professional trades are facing a resolution urging them to divest from the coal industry and discourage investees from the oil and gas sector from further “high-risk” extraction projects.
The resolution comes from the Danish Fossil Free Campaign, a Copenhagen-based NGO, and has been filed in time to be put to a member vote during the six schemes’ annual meetings in April.
While the schemes, including MP Pension (for academics), DIP and ISP (engineers), JØP (lawyers and economists), DIP & ISP (engineers), AP (architects) and PJD (veterinarians), insure more than 200,000 people between, only a fraction of their members vote at their annual meetings.
For example, when the Danish Fossil Free Campaign filed a resolution urging complete divestment of fossil fuels at MP Pension, JØP and DIP in 2014, the votes cast from members of the three schemes totalled less than 2,000. That said, the results at MP Pension and DIP were close in 2014, with the votes in favour of divestment accounting for 49% and 46%, respectively, of all cast.
Calling this year’s resolution “a lot less ambitious,” Thomas Meinert Larsen, a Copenhagen professor who is part of the NGO, believes that it will get a majority at MP Pension, JØP and DIP this time.The resolution calls on the schemes to divest from the largest 100 coal companies by 2018 at the latest. It also urges engagement with oil and gas firms to get them to end extraction projects like tar sands, deep-sea drilling and drilling in the Arctic.
According to Larsen, the Danish public is turning against coal because of its huge impact on the climate. Danish pension funds are also beginning to take the “stranded assets” argument seriously, which calls into question the need for additional oil and gas exploration, he said.
However, Unipension, a pension administrator that looks after the DKK100bn (€13.4bn) in assets from MP Pension, AP and PJD, stressed that the votes on divestment were non-binding. “Our boards do not have to respect the votes’ outcome. According to Danish law, the board of a financial institution is responsible for the investment strategy and this responsibility cannot be delegated,” said a spokesman for Unipension. DIP has said that if a majority for divestments emerges as a result of the vote during its annual meeting, it would put the issue to all of its 22,000 members.
Added Larsen: “We hope that board of the pension funds will endorse our proposal. If they do, then it will likely be approved by a large majority of voters and the board will implement those decisions. If the board does not endorse our proposal, we think the results will be close.”