PFA customers can make their pension savings CO2-neutral by 2025
PFA, the largest pension company in Denmark, is now providing their customers with access to PFA Climate Plus, a sustainable pension product that will enable them to choose how much of their pension savings to invest in particularly climate-focused investments
For many years, PFA has aimed systematically to incorporate consideration for the climate and environment, corporate governance and social responsibility when investing its customers’ savings. PFA is upping this endeavour. Customers now have the option of a new savings solution, PFA Climate Plus, specifically targeted at climate-friendly investments. This is what Kasper A. Lorenzen, PFA’s Group CIO, has to say:
“Climate change may have major consequences for our future. It’s a historic, global challenge that requires immediate action from politicians, the business community, organisations and citizens if we are to slow down the way things are going. At PFA, we are aware of the role we play in managing pension funds of approximately DKK 550 billion for our 1.3 million individual customers and 6,000 corporate and organisational customers. PFA Climate Plus takes this approach one step further in an attempt to support a positive development, and we're doing so in a way that makes it easy for customers to choose how much of their savings to invest in particularly climate-focused investments,” says the Group CIO.
A key element of PFA Climate Plus is the fact that it is easy for customers to allocate all or parts of their pension savings to reducing CO2 emissions. The product will feature a targeted selection of shares in companies that are working to reduce global CO2 emissions and make a positive impact on the climate, combined with investments in climate-friendly projects such as offshore wind farms and sustainable properties. There will be no investment in oil, coal or gas.
Good returns with a green conscience
At the same time, Kasper A. Lorenzen hastens to add that he does not believe the focus on climate will undermine PFA’s return ambitions. According to the Group CIO, the two considerations are becoming increasingly and inextricably linked.
“The ability to manage climate risks is becoming an increasingly important parameter, if a company is to achieve success in the long run. By upping our efforts in this area even more, we are not only taking the developments in society into account; we also believe that good returns are increasingly going to be green. For the same reason, our climate investment endeavours are not only part of PFA Climate Plus, but also a strong priority in the rest of our investment portfolio,” says Kasper A. Lorenzen.
He explains that, basically, opting for PFA Climate Plus will not change the risk level and return potential of the savings. The return on PFA Climate Plus will differ from the return on PFA Plus, since the portfolios are different. Further, due to the special considerations for the climate, PFA Climate Plus is a more concentrated portfolio consisting of fewer assets.
CO2-neutral by 2025 – and CO2-negative by 2030
The idea of PFA Climate Plus is to make it simple to invest your pension in a climate-friendly way and to see your carbon footprint. That is why PFA Climate Plus is based on three concrete climate goals. Basically, shares in PFA Climate Plus will emit 60 per cent less CO2 than the global equity index, and the goal is for the entire product to be CO2-neutral by 2025. The next ambition is for the portfolio to be CO2-negative by 2030, thereby removing more CO2 from the atmosphere than the investment emits. This will be done, for example, on the basis of investment in forestry and technology that reduces CO2.
Kasper A. Lorenzen is convinced that this is an ambitious additional option for PFA’s numerous pension customers who would like to invest their savings more directly to benefit the climate. He also emphasises that PFA has high climate ambitions in general, and has committed to the total investment portfolio being CO2-neutral by 2050.
PFA Climate Plus will be an integral part of the company's advice
The new savings solution will be an integral part of PFA’s advice – whether as a pension consultation or self-service. PFA customers can select the new savings solution in the PFA’s self-service universe: mitpfa.dk The process is easy and straightforward. In addition to the traditional questions about budget, risk and investment, the helpful Investment Guide now also features questions on climate preferences. Accordingly, the Investment Guide provides you with both a recommendation on risk profile and the choice of PFA Climate Plus.
PFA Climate Plus - Facts
- The equity portfolio currently comprises approximately 50 companies.
- Unlisted investments (alternatives + properties) will make up 20-25 per cent, just as in PFA Plus.
- Basically, shares in PFA Climate Plus will emit 60 per cent less CO2 than the global equity index.
- The ambition is for the entire product to be CO2-neutral by 2025.
- The next ambition is for the portfolio to be CO2-negative by 2030, thereby removing more CO2 from the atmosphere than the investment emits.
- Customers’ share of CustomerCapital will not change when choosing Climate Plus.
- PFA Climate Plus has the same level of risk and return potential as the current market rate product, PFA Plus.
Christopher Due Karlsson, (+45) 23 64 83 44 or email@example.com.