Danish bill set to strengthen pension/insurance industry's opportunities for green investment

Written by Sophie Smith

13/01/2025

The Danish Government's new bill is expected to make it more attractive to "invest green", by making it possible for pension funds and insurance companies to own and operate forests through a subsidiary, Denmark's Forsikring & Pension (F&P) has said.

F&P noted that whilst a broad political majority agreed in 2022 that it would allow the pensions and insurance industry to do this, the EU Commission has now confirmed that this is also possible within EU rules.

Given this, F&P deputy director, Torben Weiss Garne, highlighted the bill as a "step forward for customers, the climate and the economy", explaining that investments in forests also usually fit well with the funds' investment profile.

He continued: "With the bill, the government aims to strengthen the green transition and better regulation. The proposed option for companies to own and operate forests through subsidiaries is a clear step in the right direction.

"We have long had a desire to play a greater role in the green transition. With this change, insurance companies will have a better opportunity to invest in forestry and thus contribute to sustainability.

"At the same time, pension companies will have the opportunity to generate returns for customers while supporting the green transition, sequestering CO2 and promoting biodiversity."

The group suggested that allowing non-life insurance companies to report in line with the International Financial Reporting Standards (IFRS), instead of the Danish accounting rules, will create better comparability and transparency both nationally and internationally, and ease the administrative burdens that come with reporting under two different sets of rules.

"It is a win-win scenario for both the insurance companies and their shareholders," Weiss Garne said.

According to F&P, the bill is expected to be presented in February and passed during the spring.

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