Companies have a crucial role to play in the green transition, as do investors through engagement and active ownership. As an asset manager, Danske Bank has both the ability and determination to play a significant role in the decarbonisation of the economy.
Earlier this year, Danske Bank signed the Net Zero Asset Managers Initiative, which represents a group of international asset managers committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner.
To further support the 2050-goal, Danske Bank is setting two interim targets:
The bank’s 2030-target is to reduce the weighted average carbon intensity of its investment products by at least 50 percent against a 2020 baseline.
In addition, the bank commits by 2025 to engage with the 100 largest emitters to address expectations of climate transition stewardship aligned with the net zero targets.
Real world impact
The interim targets are prioritising the achievement of real world CO2-reductions rather than use divestment as a primary tool.
Our primary approach will rely on a strong net zero stewardship and engagement strategy to achieve real world decarbonisation for the benefit of both investors and society at large.Thomas Otbo, Chief Investment Officer, Danske Bank
“The easiest way to decarbonise a portfolio is by eliminating exposure to companies in carbon-intensive sectors such as utilities and cement. However, there is no clear evidence that such an approach would yield any real world impact. It could even be considered counterproductive, as companies in high emitting sectors need investor capital to be able to decarbonise and transition", says Thomas Otbo, Chief Investment Officer at Danske Bank.
Thomas Otbo elaborates:
"We will of course use exclusions as a tool if we don’t see a credible transition path. However, our primary approach will rely on a strong net zero stewardship and engagement strategy to achieve real world decarbonisation for the benefit of both investors and society at large".