Industriens Pension is introducing a new climate-related benchmark to reduce the climate impact of its investments and guide its foreign stock investments.
In the future, the performance of Industriens Pension’s foreign stock investments will be primarily evaluated based on a new global climate-related stock index, which focuses on companies’ climate transition and will significantly impact Industriens Pension’s foreign stock investments.
Industriens Pension's foreign listed shares, valued at almost DKK 60 billion, will now be compared to the newly established MSCI Climate Action Indexes and the broad MSCI ACWI global stock index as before.
Introducing a climate-related benchmark that focuses on companies' restructuring process encourages managers to prioritize companies' transition and CO2 emissions, providing a framework for investments.
“The new benchmark aligns with Industriens Pension’s goal to not only invest in low CO2 emission sectors but also focus on the challenging transition for high-emission companies, aiming to reduce greenhouse gas emissions while generating good returns.Industriens Pension’s equity manager, Morten Rask Nymark, explains the significance of the new benchmark in guiding investments.
Updating of traditional 'climate indices'
Historically, traditional stock indices with climate profiles have focused on companies and sectors with the lowest CO2 emissions, but the new MSCI Climate Action Indexes consider both current CO2 emissions and future reduction goals and commitments.
“Axel Kilian, Managing Director, EMEA Client Coverage at MSCI, discusses the importance of innovative tools and solutions in making sustainable investment decisions.Industriens Pension and MSCI are proud that their tools are being utilized to balance sustainable value creation and returns.
Morten Rask Nymark emphasizes the role of a benchmark as the starting point for portfolio managers when investing, highlighting the performance risk of selecting companies far from the benchmark.
Key role in CO2 reduction plan
The MSCI Climate Action Indexes will frame the assessment of managers’ return performance and CO2 reduction progress, playing a significant role in Industriens Pension's plan to lower the climate impact of its investments.
As a part of the global investor network Net Zero Asset Owner Alliance, Industriens Pension has already officially agreed that the entire investment portfolio must become CO2 neutral by 2050 at the latest.
