COP26: UK and Nordic pension schemes join forces for climate commitment

CEOs of Nordic and UK pension funds at COP26 have announced a collective financial commitment to invest US$130bn in clean energy and climate investments by 2030.

The commitment was made by asset owners in Sweden, Norway, Finland, Denmark, Iceland, the Faroe Islands and the UK, and will also require pension funds to report annually on the progress of their climate investments.

Launching the plans, Denmark Prime Minister, H.E Mette Frederiksen, commented: “Green transition requires massive investments. Governments have to do their part and commit to a new green future. But we also need private investors on board.

“In 2019, Danish pension funds committed to invest US$55bn in the green transition by 2030. I am proud that we have inspired others and that Nordic and UK pension funds are now ready to invest US$130bn in total by 2030.”

Adding to this, Nest Chief investment officer, Mark Fawcett, commented: “We’re already hard at work to deliver our net-zero 2050 ambition, having taken immediate steps to reduce our portfolio’s carbon footprint and halve our emissions by 2030.

“This includes a commitment to invest billions of pounds into renewable infrastructure over the coming decades. We want to give Nest members a bigger pension in a better world and helping to tackle climate change is a key part of that.”

The commitment is expected to help contribute to the increasing global climate ambition and encourage the global uptake of climate investments, and has been supported by the Climate Investment Coalition (CIC).

The CIC is an international pubic-private sector initiative that aims to create an international wave of climate investments to support meeting global goals for climate and sustainable development.

Commenting on the commitment, CIC co-chair, Peter Damgaard Jensen, said: "These ambitious pension funds are taking critical steps to ensure pensions take advantage of the enormous opportunities of the green transition, help spur immediate solutions to lower carbon emissions, while protecting our savings against the ravages of climate change.

"As we look ahead beyond COP26, we aim to grow these financial commitments, raising investor ambition to create a far reaching impact by 2030."

Institutional Investors Group on Climate Change CEO, Stephanie Pfeifer, also highlighted the pledge as a signal to policymakers, project developers, and corporates that investors are seeking additional investable opportunities.

"The IEA’s 1.5 degree scenario shows that total investment in the energy system alone needs to increase 9.6 per cent per annum between 2020 and 2030," she continued.

"Quantitative targets from IIGCC members to scale up these investments are a clear sign of their commitment to supporting the net zero transition over the coming decade."

Adding to this, Make My Money Matter campaign director, David Hayman, pointed to the commitment as demonstration of "just how powerful our pensions can be in tackling the climate crisis".

He continued: "Nordic and UK pension schemes are using their pension power to tackle the climate crisis, not fuel the fire. Now it’s time for the rest of the industry to follow suit; urgently reducing emissions, investing in climate solutions, and committing to robust net-zero commitments.

"Along with today’s political announcements on deforestation, it is clear that those who hold our money can no longer shirk from their responsibilities – they must act with the urgency that the world demands. This commitment is a critical first step in ensuring everyone has a pension to be proud of”

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