A 30-billion-DKK fund for sustainable investments is established, when a team between Danish pension funds PKA and PenSam is joined by Norway-based asset management giant Storebrand. 

Has knowhow on ESG factors (environmental, social and governance) become a new driver of structural change in the funds industry? Well, at least in this case it is.

Up to 30 billion Danish kroner (currently close to 5 billion USD) is to be invested over the coming three to four years, a press release tells. It will be managed by AIP Management, a company owned jointly between the three parties and currently managing holding worth some 3 billion USD. 

PostTrade 360 Nordic 2024

“We are raising our common ambitions for sustainable investments to a new level,” says Jon Jonsen, CEO of PKA, referring to the new initiative as “one of the largest climate and infrastructure funds ever in the Nordic region”. 

Poor ESG score – high financial risk

Having emerged with a backing by sustainability-concerned investors, ESG projects are increasingly financed on their purely financial merits, as investors associate them with less risk for example in relation to future regulation, public image, investment needs for business updating or poor governance. This is now impacting the funds landscape strongly – a recurring topic for PostTrade 360° both in this news flow and in our conferences.

In terms of how it affects fund operations as such, the recent PostTrade 360° Amsterdam featured this interesting session by ABN Amro’s Vincent Triesschijn on his company’s investment evaluation method and collaboration with industry colleague Aegon. Simultaneously, in the back office space, big questions arise around issuers’ reported ESG data: how to get it, interpret it and sum it up into something useful. Hope of progress is tied to the EU’s upcoming ESG disclosures and taxonomy, intended to standardise the way sustainable initiatives are described. On this topic, see Janine Hofer-Wittwer of SIX present an overview in this session video

(Photo: Irfan Alijagic / Unsplash)