Danish pension investor PKA excludes 31 coal mining companies, will engage with further 23

Danish pension fund service provider PKA has decided to exclude coal 31 mining companies.

In a statement, PKA noted how it has increased its green investment significantly over the past few years and that it currently has around DKK13bn invested in climate-related projects – as demonstrated by its decision last week to invest for a second time (alongside a range of international investors) in KfW’s green bond programme, this time in an A$600m debut “Kangaroo” Green Bond.

“Now PKA has made the decision to put 31 mining companies having more than 90% of the their business coming from coal, on the negative list,” PKA said, without naming the companies involved.

The DKK201.7bn (€27bn) investor will also engage with a further 23 companies where 50-90% of their business comes from coal in order to get them to reduce the use of coal. If they don’t demonstrate within a year that they have a plan to cut their coal exposure, they too will be excluded.

PKA’s Executive Director Peter Damgaard Jensen said: “If the United Nations target of a maximum temperature rise of 2°C is to be settled, it is not enough to invest in green energy – it is simultaneously necessary that the scale of the global coal consumption is lowered significantly.

“Consumption of coal is the largest CO2-sinner. We therefore exclude coal companies and hope that through dialogue we can also affect other businesses, where coal is a big part of the business, to reduce the consumption of coal.” He stressed the high risks of investing in coal was shown by the share price declines of coal firms. “Coal is expected to be the first type of fossil fuel which will be phased out of the global energy production,” he added.But it was too early to say whether PKA would introduce similar restrictions on other fossil fuels; PKA would analyze other fossil fuels to see if it is appropriate to impose the same restrictions: “But we’re not there yet.”

“They probably don’t have a future.”

“Actually, we would prefer to have a dialogue with these companies instead of just excluding them, but if a company is exclusively engaged in coal mining, there is not so much to base a dialogue on. They probably don’t have a future, although coal will probably be used for some years ahead.”

PKA is one of the largest Danish pension investors, investing on behalf of 265,000 members, 90% of whom are women in the health care sector. It’s not one of the funds being targeted by AnsvarligFremtid divestment campaign but the campaign’s Thomas Meinert Larsen welcomed the move.

The move comes as The Guardian newspaper interviewed the Rockefeller Brothers Fund on its decision to divest fossil fuels. The paper also reported that the United Reformed Church of Scotland has committed to withdraw its investments in fossil fuel companies. It said a resolution was passed with “overwhelming support” at a meeting over the weekend.

Elsewhere, Mirova, the responsible investment arm of France’s Natixis Asset Management, has teamed up with consulting firm Carbone 4 to develop a way to measure companies’ contribution to the energy transition. The methodological principles will be published in September 2015 and will be shared with “all financial actors that are interested in this approach”. Link (Danish)