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Denmark’s PKA puts VW and Tesla on watch list as it launches active ownership site

Fund excludes five companies involved in Dakota Access pipeline

Denmark’s PKA has revealed that scandal hit German car manufacturer, Volkswagen, and US electric car pioneer, Tesla, are on its “watch-list” as the pension fund ramps up its transparency around engagement with the creation of a new website dedicated to its active ownership.

The website – created late last year – makes public details of the DKK275bn (€28bn) fund’s engagement with the companies it owns, reveals those on its watch-list, and those it has excluded.

It has also just announced a decision to exclude five companies involved in the controversial US Dakota Access pipeline: Energy Transfer Partners, Energy Transfer Equity, Phillips 66, Enbridge Inc., and Marathon Petroleum.

The decision was taken in response to the companies “lack of willingness” to discuss PKA’s concerns around the 1,000-mile oil pipeline – particularly those around potential violations of indigenous peoples’ rights. In 2017, the UN Special Envoy of Native Rights expressed its opinion that the pipeline was approved without adequate social, cultural, or environmental assessment.

RI spoke to Pelle Pederson, PKA’s Head of Responsible Investing, who said that the creation of the website is a “natural step in our pursuit to be more transparent around active ownership and our response to responsible investment”.

It follows the launch last year of its platform providing an overview of its votes at annual general meetings.

Pederson told RI that he hopes the website will function as “a framework and database that allows its members to dig deeper into what we do”; he referred to it forming part of the fund’s attempt to promote “active democracy”.He added: “A lot of investors have been reluctant to disclose engagement data because they feared it could be detrimental to discussions with companies if you are so transparent around what you are engaging with them on.

“But we feel it is actually a way to move engagement on to a new level; the more investors publicise that information the better it is and the more effective the engagement will be.”

Last year, PKA excluded 32 companies due to concerns around business practices and it is currently in dialogue with 234 companies. Hermes Equity Ownership Services, the engagement arm of Hermes Investment Management, collaborates with the Danish fund on its engagements.

Elsewhere in Denmark, giant labour fund ATP says it has started posting its AGM voting data (here). It has also appointed an ATP climate officer to clarify management ownership across investment teams. And its supervisory board has adopted a new tax policy on illiquid investments, setting out ATP’s requirements for investments and business partners.

It said: “This policy establishes that ATP distances itself from aggressive tax planning that constitutes an investment risk, including reputational risk. ATP’s business partners and companies in which ATP invests are expected to conduct business in a similarly appropriate, responsible and transparent manner when it comes to tax.”