Danish investor bets big on green goals

One of Europe’s biggest pension funds is expecting double-digit returns on a new Danish investment vehicle that’s based on the United Nations sustainable development goals.

ATP, which has about $120 billion in assets under management and is based north of Copenhagen, predicts it will make about 1012 per cent with its bet on the Danish SDG Investment Fund, which was launched on Thursday. Risks will be limited because of the government’s involvement, according to ATP’s chief executive officer, Christian Hyldahl.

Hyldahl says the logic of investing in assets that track clear ethical and environmental standards hasn’t been dented by the shift in policy from the government of the world’s biggest economy. US President Donald Trump’s exit from the Paris climate accord last year was met by dismay in Europe. Denmark, home to some of the world’s biggest companies in the wind power industry, voiced particular disappointment.

But for investors, “there are plenty of opportunities and the world doesn’t stand still because the US has decided to step back,” Hyldahl said.

“This is a market in growth and there will be many opportunities, also in emerging markets countries,” he said. “So we expect that these investments will make up an increasingly larger part of our portfolio.”

The Danish SDG fund gives ATP an opportunity to get a sense of how such investments behave and how to incorporate their performance into broader portfolios. “We’re very eager to measure how this investment maps into our ESG goals,” Hyldahl said. “With this investment we can learn some lessons on how to invest in SDG and how that translates into the general ESG analysis.”