This note discusses steps taken by Denmark significantly through the Climate Investment Coalition by fostering Green Finance and Transition within the global ecosystem. Danes are leading a global march on green finance and transition through their collaborative model.
Recently, Finance Denmark, an association for banks, mortgage institutions, asset management, securities trading, and investment funds in Denmark, committed to slashing 2030 CO2 emissions from investment funds to 75% below the level of emissions of the world equity index (MSCI ACWI) in 2020. The Danes have been a leader in enabling a sustainable change and impact within the sustainable development sector and green finance is no different. In the recent Climate Investment Summit in Copenhagen, Danish Pension Funds confirmed that they will invest $50 Billion by 2030 in green finance towards (clean energy and climate-related investments) with $8 Billion invested in green transition within the last year. Charging ahead like a raging bull, the Danes plan to achieve the $50 Billion target by 2027 looking at the present pace of investments in global green transition.
Climate Investment Summit agenda was to drive in public-private partnerships through collaborations across multiple sets of actors like governments, corporations, asset managers, institutional investors, and international organizations showcasing the best sustainable practices for climate action and promote green economic recovery. With a focus on green finance and transition to sustainable evergreen climate solutions, Denmark is delivering a measurable social change and impact within the global ecosystem. Hosted by The Climate Investment Coalition, a global thought leader formed by a public-private collaboration between the Government of Denmark, Insurance and Pension Denmark – and the Institutional Investors Group on Climate Change (IIGCC) and World Climate Foundation to catalyze Sustainable Development Goal seventeenth goal of public-private partnership for climate solutions.
“When the private and public sectors join forces, we can make a difference in the real world. The Danish pension industry has delivered on its commitment to increase green investments, and now the Danish asset managers have also set an ambitious climate target. The next step is to get international institutional investors to join with additional green commitments so we can create a global momentum for green investments. That is one of my key priorities towards COP26 next year”, says Danish Minister of Climate, Energy and Utilities Dan Jørgensen, Co-chair of the Climate Investment Coalition, who opened the conference.
Developers including project developers, utilities and energy companies, and technology providers were among the key actors playing a significant role in the multifaceted collaborative attempt in addressing climate change and action. The summit signifies the growing importance of asset owners like pension funds in providing capital for enabling projects linked to green finance. In recent years, Japanese pension funds have been game-changers in fostering ESG (Environmental, Social, and Governance) themes within the investment management sector. If the world is even close to meeting the UN SDGs target by 2030, asset managers and asset owners especially mega pension funds both public and private will play an enhanced role in driving wealth to bridge about $2.5T – $3T of investment gap to achieve goals set in SDGs.