Denmark’s central bank seeks ESG data provider and screening tool for €57bn fund

Danmarks Nationalbank tenders for provider to help screen assets of foreign-exchange reserve fund on alignment with Paris

Denmark’s central bank has today put out a tender for an ESG data provider to deliver a screening tool for the country’s foreign-exchange reserve to help ensure that the assets of the €57bn (Dkr.427bn) fund are managed in compliance with ESG guidelines.

Danmarks Nationalbank is an independent self-governing institution responsible for Denmark’s financial stability. It is also a member of the central banking climate body the Network for Greening the Financial System (NGFS).

The Danish foreign-exchange reserve, the pool of capital used by the bank to support the country’s currency through the buying and selling of Danish kroner and foreign exchange, falls under the responsibility of the Danish central bank.

The bank manages the assets of the fund passively but is required to comply with ESG guidelines, including exclusions.

The successful tenderer for the contract – worth €825k (kr.6.1m) over four years – will provide a tool that allows the bank to “easily” screen the fund’s portfolio.

That screening tool, the bank stipulated, will allow a “large portfolio of companies” to be assessed on areas like involvement in controversial weapons; involvement in fossil fuels; greenhouse gas emission intensity, including supply chain emissions (Scope3); alignment with Paris-aligned climate scenarios; and transition risk management.

ESG data provided by the successful tenderer will cover fixed income, listed equities and funds at the national and international level. The document added that where available, the data should also cover unlisted equities and derivative securities.

The central bank also stated that it requires access to “all” of the “underlying data feeding into the ESG ratings,” including references to the “original source of the data indicating whether the data are estimated by the data provider or collected from a company’s annual report or other financial reports, as well as the financial year.”

The provision of the ESG data will help the bank “build capacity” and support its efforts to integrate “climate-related financial risks into its monitoring and assessment of risks to the financial system,” the tender document stated.

RI contacted Danmarks Nationalbank for a list of current ESG-based exclusions and on whether the tender is a new contract or a re-tendering but has not received comment at the time of writing.