text stringlengths 0 7.73k |
|---|
Circular economy, targets 12.2, 12.3, 12.4 and 12.5. |
Climate action Climate and transport TCFD. |
Life below water 1 fact-finding regarding target 14.1. |
Life on land 1 fact-finding regarding target 15.5. |
Peace, justice and strong institutions. |
Fighting corruption in the pharmaceutical industry, target 16.5 4 fact-findings regarding target 16.5. |
Partnerships for the goals Memberships and participation in various forums such as PRI, CDP and more 1 fact-finding regarding target 17.1 Memberships and participation in various forums such as PRI, CDP and more. |
Fact-findings Thematic engagements Goal. |
Read more about the individual thematic engagements on page 53 and fact-findings on page 60. |
15. |
Responsibility 2018 up with solutions to these challenges. An increased focus on the SDGs may also mean that companies identify new business opportunities. For investors in these companies, it may potentially lead to increased growth and long-term value creation. |
In the SDG dialogues that ATP has had with companies, focus has initially been on stepping up awareness of the inherent business opportunities. ATP finds that many companies have a firm focus on the goals and how current and future business operations can be positively integrated with the SDGs. |
However, ATP has also pointed out that companies should also focus on the parts of their business that contribute negatively to the achievement of the SDGs. A natural progression in companies’ reporting activities will therefore be to be mindful of any negative contributions, and how negative impacts on the SDGs can be... |
The Danish shipping company A.P. Møller-Mærsk addresses both their positive and negative contributions to the SDGs in their reporting, landing them an award for the best CSR report in 2018. ATP welcomes similar efforts by companies working with business opportunities and risks once they have reached the required level ... |
Targeted funding All ATP’s investments have a greater or lesser degree of impact on one or more of the 17 SDGs. Some of ATP’s investments, however, have a very clear link to the SDGs as a whole or to selected SDGs. |
ATP has invested in IFU’s SDG Investment Fund together with a number of other Danish pension funds. The aim of the SDG Investment Fund is to contribute to achieving the UN’s SDGs through investments in the private sector in developing countries. ATP’s commitment to the SDG Investment Fund amounts to DKK 400 million. Th... |
CASE: Inherent dilemmas of the SDGs. |
As an institutional investor, ATP is faced with certain dilemmas in its work on responsibility – also when it comes to companies’ positive and negative contribution to the SDGs. For example, ATP often finds that a portfolio company contributes positively to one goal, but negatively to another. A company that constructs... |
ATP actively addresses these dilemmas in its efforts to integrate ESG into its investment processes and in its active ownership activities within the framework of the Supervisory Board’s Policies of Responsibility in Investments and Active Ownership. |
Dialogue is ATP’s preferred tool. By entering into a constructive and patient dialogue with the companies ATP invests in, we are able to gain an understanding of the challenges facing the companies, which, in turn, can be used to make better and more informed investment decisions. Dialogue also allows us to encourage t... |
16. |
Responsibility 2018 to the generation of financial returns for the benefit of ATP’s members, but it may also contribute to ATP’s understanding of the SDGs, among other things through ongoing measurements and reporting from the SDG Investment Fund about how it contributes to the achievement of the SDGs. |
Another indicator of the clear link between ATP’s investments and the SDGs is ATP’s investments in green bonds. In 2018, ATP stepped up its investments in green bonds, bringing the value of ATP’s portfolio of green bonds at the end of the year to almost DKK 10 billion. The green bonds are earmarked for funding for proj... |
17. |
Responsibility 2018. |
Physical changes in the climate and weather systems, new and stricter climate regulations, technological advances and changed consumer behaviour are some of the climate-related financial risks that may potentially affect the global economy, the preconditions for future growth and thereby also the long-term potential re... |
There is a consensus that climate change has the potential to affect the economy, but it is difficult to predict exactly how and when different markets and economies will be affected. This is because it is not only difficult to predict the impact on different markets and regions, but also the timing and the force of th... |
Climate change affects companies’ long-term value creation capabilities, but the companies’ actions also have a direct impact on the climate. |
ATP’S CLIMATE EFFORTS. |
ATP is working on many fronts to incorporate climate considerations into its investment processes. |
In its Responsibility Report 2017, ATP gave a detailed description of the TCFD’s recommendations which ATP takes an in-depth, two-pronged approach to. |
Firstly, ATP has adopted the supplemental guidance for investors in order to better understand ATP’s own climate-related financial risks. In 2018, ATP continued its work on all the TCFD’s four main recommendations (Governance, Strategy, Risk Management and Metrics), focusing particularly on climate scenarios. |
Secondly, ATP also encourages companies that ATP invests in to adopt climate-related financial disclosures, including the recommendations of the TCFD. |
Read about ATP’s work in this area in 2018 on the following pages. |
Governance for climate-related financial risks The TCFD recommends that businesses describe their governance for climate-related financial risks, including how the Supervisory Board and management will be involved. |
ATP’s Supervisory Board has adopted the Policy of Responsibility in Investments, which lays down the overall framework for ATP’s climate efforts. ATP’s responsibility reports are approved by the Supervisory Board, and the Supervisory Board also receives regular reporting on ATP’s responsibility efforts, including the w... |
Climate considerations are included in ATP’s risk management on an equal footing with other business-related risks. Because ATP has historically dealt with climate issues at asset level, the actual work on integrating climate risks and opportunities has been handled decentrally by the different investment teams. |
In light of the TCFD’s recommendations, ATP has made efforts to strengthen its organisational processes, developing a governance model that ensures clearer management ownership and knowledge sharing across ATP’s investment teams. |
As a result, ATP appointed a climate officer (deputy director) in 2017, who is responsible for ensuring that climate issues are integrated into investment processes across the investment area. |
In 2018, ATP continued its governance efforts in the area. ATP’s ESG team is anchored in the Investment department rather than the Risk department, and it has also been decided to relegate responsibility for climate issues to the CIO. |
ATP’s Climate Forum is headed by ATP’s climate officer. The Climate Forum consists of six executives, including five. |
Climate |
18. |
Responsibility 2018 investment managers and one ESG director. They constitute ATP’s Climate Forum where the climate officer and the executives meet to initiate relevant development projects. The Climate Forum also serves as a forum for discussing and exchanging experiences with climate-related financial risks across th... |
Active ownership as a tool for knowing and minimising risks ATP has a strong track record of exercising active ownership in relation to climate issues. |
Generally, active ownership is used to gain an understanding of a company’s challenges and company-specific risks through dialogue with the company. ATP can then use this understanding to make better and more informed investment decisions. On the other hand, ATP can help to minimise risks and promote companies’ long-te... |
In 2018, ATP, along with other investors, helped put pressure on Shell. A shareholder proposal at Shell’s general meeting in May 2018 demanded that, going forward, Shell set specific targets for its greenhouse gas emissions. Shell had already announced ambitions for its emissions, but no firm targets. Following a concr... |
ATP influences companies to report on their carbon emissions As part of its active ownership, ATP encourages companies that do not report on their carbon emissions to take action to monitor its climate risks through reporting. |
ESG data is important input in ATP’s risk management and investment analyses. But the quality of the data on companies’ carbon emissions varies quite considerably. This is because external data suppliers estimate the companies’ emissions if the companies do not report on them, leading to considerable uncertainty about ... |
In 2018, ATP therefore reached out to 68 companies in order to influence them to monitor climate risks and report data. |
ATP’s use of crude oil futures. |
ATP’s objective for investment of the assets is to maintain their real value. This is achieved by placing some of ATP’s investments in assets which are expected to increase in value in a situation of rapidly rising inflation. To this end, ATP uses a variety of investment assets and risk management instruments, includin... |
In ATP’s view, a portfolio that includes crude oil futures is better able to maintain its real value than a portfolio without crude oil futures. This is because inflation is measured as price changes on a representative basket of goods, where the price of crude oil directly and indirectly affects the price of many of t... |
When ATP invests in crude oil future, the investment is always settled in cash before the future expires. ATP does not take delivery of the crude oil and therefore does not achieve physical ownership of the crude oil, and nor does ATP consume oil through its use of crude oil futures. ATP’s trade in crude oil futures ta... |
In step with the green transformation which seeks to lessen the dependence of the world economy on fossil energy and thereby reduce its relevance, ATP continually assesses whether other instruments are better suited to maintaining the real value of the portfolio. |
19. |
Responsibility 2018. |
CASE: ATP calls for electricity producers to prepare for a green future. |
Based on an analysis of its portfolio, in 2018 ATP engaged in a dialogue about sustainability and green transformation with electricity producers that rely on coal for more than half of their electricity production. As a result of the dialogues, ATP chose to sell its investments in a number of companies that had not pr... |
Electricity producers are currently some of the largest emitters of greenhouse gases into the atmosphere. Electricity producers supplying energy to citizens and companies have relatively high emissions which is to be expected. The level of carbon and other greenhouse gas emissions depends on the energy mix, i.e. the sh... |
Consequently, the actions of electricity producers are also key to successfully halting global warming and moving the global economy in a green direction. |
In its latest World Energy Outlook 2018, the International Energy Agency predicts an ever-increasing demand for electricity, including electricity produced by coal. A complete phase-out of coal in the global electricity production will therefore make it impossible to meet the global demand for electricity. In addition,... |
Nevertheless, ATP believes that, going forward, energy production must be based on sustainable energy sources if we are to reach the targets set out in the Paris Agreement. This also means that companies seeking to adopt a business model that is sustainable in the long term should adapt to this new reality. ATP believe... |
In early 2018, ATP reviewed its entire equity portfolio in order to select companies for dialogue about the green transformation and carbon emission reductions. Using historical data about the energy mix of specific companies, ATP identified a number of companies that rely on coal for more than half of their energy pro... |
One of ATP’s primary goals of the dialogues was to learn about the companies’ plans for a future reduction of the share of coal in the energy mix. ATP focuses on energy producers reducing the share of coal in their energy mix, because it is the most realistic way to cut carbon emissions in the short and medium-long ter... |
However, the dialogues also showed that a small group of utility companies were more risky seen from a climate perspective. They either did not wish to enter into a dialogue on the subject, or they seemed unwilling to start the process of preparing for a green transformation. ATP sold these companies for commercial rea... |
However, during the dialogues, ATP also became aware that the historical data was inconsistent with the companies’ own figures and calculations. ATP presented these findings to its data provider which subsequently changed its calculations. |
20. |
Responsibility 2018 on their carbon emissions. Good quality data is a prerequisite for ATP’s ability to make good investment decisions. As part of its active ownership model, ATP always strives to provide detailed information to companies if it votes against the Supervisory Board at the general meeting. In such exchang... |
ATP also tries to influence companies through the Climate Action 100+ investor initiative. Over a five-year period, ATP will team up with other investors to influence the top 100 global carbon emitters to embrace the green transformation. ATP participates in 53 dialogues with European companies in different sectors, am... |
ATP INCREASES INVESTMENTS IN GREEN BONDS. |
In 2018, ATP stepped up its investments in green bonds, bringing the total value of ATP’s portfolio of green bonds to almost DKK 10 billion. At the same time, ATP has entered into a dialogue with the issuers to increase transparency, so that investors and other stakeholders know exactly which projects are funded by the... |
In 2017, green bonds were a brand-new area of investment for ATP. In 2017, after having followed the developments in the market for green bonds for several years, ATP decided to buy green bonds for DKK 1.5 billion. |
Green bonds are special in that the issuer of the bond uses the proceeds to fund climate-friendly investments. A climate-friendly investment is for instance an investment in increased energy efficiency. ATP invests in green bonds of a credit rating that matches that of the bonds which ATP is already investing in. In ad... |
Unclear terms There are no fixed definitions of many of the terms used in sustainable finance, including green bonds. An ambitious project is ongoing in the EU to develop a common standard and language of sustainable finance. The EU has set up a High-Level Expert Group on Sustainable Finance which has developed a numbe... |
The Green Bond Principles, which have been developed by the International Capital Market Association (ICMA), is a set of international guidelines designed to promote integrity and better reporting. The principles are very broadly formulated and are not legally binding. ATP has been engaged in the interpretation of the ... |
ATP enters into dialogue on transparency with issuers Transparency is important to ATP which is why we engage in an ongoing dialogue with green bond issuers. Specifically, ATP wants to enhance the quality and volume of data from bond issuers to provide investors with detailed information about the projects and climate ... |
21. |
Responsibility 2018 with green bond issuers with the aim of increasing transparency and traceability. |
Mapping issuer transparency ATP has mapped the reporting, including the degree of transparency, of those issuers from which ATP has purchased bonds. The mapping will form the basis for ATP’s ongoing dialogue with issuers on issues such as improved data quality in their reporting. The quality and volume of data from the... |
Nordic Investment Bank (NIB) and the International Bank for Reconstruction and Development (IBRD) also maintain a high degree of transparency about all the projects financed by them, including the name, expected positive environmental impact and geographical location of the projects. It is not possible to track the ind... |
The Danish government credit institution KommuneKredit, from which ATP purchased bonds in 2018, is transparent about the projects financed by green bonds. However, KommuneKredit anonymises the projects which means that the names of the projects are not disclosed. Instead, the reporting provides a detailed description o... |
ATP has also invested in Belgian and French green government bonds and in KfW, a German bank for development financing. These three issuers are the least transparent in ATP’s green bond portfolio when it comes to transparency about the projects financed by their bond issues. These bond issuers do not provide a complete... |
CLIMATE-RELATED METRICS – CARBON FOOTPRINT AT PORTFOLIO LEVEL. |
In 2018, as part of the work on TCFD’s recommendations, ATP also published carbon footprint calculations made using a variety of methods. In 2018, ATP was able to publish its corporate bond positions. As a consequence of the increased transparency about company names, ATP is able to report on its carbon footprint from ... |
ATP is of the opinion that portfolio carbon footprint as a metric to understanding investors’ climate-related financial risks has limited application. ATP believes that companies should take action to curb carbon emissions. But if investors follow the same logic and sell off companies with high carbon emissions, it wil... |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.