Nordic and UK pension funds commit $ 130 billion to tackle climate change

Birds fly over a closed steel plant where the chimneys of another working factory are seen in the background, in Tangshan, Hebei province, China on February 27, 2016. REUTERS / Kim Kyung-Hoon / File Photo

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GLASGOW, Nov 2 (Reuters) – Nordic and UK pension funds pledged on Tuesday to invest $ 130 billion by 2030 to tackle climate change and to report annually on the progress of their green investments.

Denmark said $ 75 billion of the funds were new commitments. The pledge, launched at the COP26 climate summit in Glasgow, Scotland, included asset owners in Sweden, Norway, Finland, Denmark, Iceland, the Faroe Islands and the UK, as well as ‘a Greenland fund.

“The green transition requires massive investments. Governments must do their part and commit to a new green future. But we also need private investors on board,” Danish Prime Minister Mette Frederiksen said.

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The group included funds that joined the growing number of fund managers turning away from fossil fuels, amid growing pressure for the financial sector to support urgent actions to tackle climate change.

Among them were Nordic asset manager Storebrand, Norway’s largest private asset manager with $ 91 billion in assets under management, which last year divested companies such as Chevron and ExxonMobil for their lobbying on the climate, and the Danish ATP, which has pledged to stop putting money in external funds. who hold investments in fossil fuels.

Huge investments will be needed in low-carbon industries, transport, energy and agriculture to put the world on track to achieve net zero CO2 emissions by 2050 and limit global warming to 1.5 ° C above pre-industrial levels. Bernstein analysts estimate that $ 2 trillion to $ 4 trillion must be invested annually to achieve this goal.

The pension fund investments would target areas such as low carbon energy infrastructure, green bonds and environmentally friendly real estate investments.

“The aim is to accelerate developments that promote cleaner energy for use in transport and business activities in Iceland,” said Thorey S. Thordardottir, Managing Director of the Icelandic Pension Fund Association.

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Reporting by Kate Abnett in Brussels, Katy Daigle and William James in Glasgow; Editing by Janet Lawrence

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