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No more fossil fuels in index funds with a sustainable investment goal

Danske Invest has decided to divest all investments in fossil fuels from six index funds with a sustainable investment goal.

As of 17 March 2022, Danske Invest will exclude fossil fuels from six index funds. The exclusion follows the threshold ​​in our policy, where all companies with more than 5 percent of the turnover related to fossil fuels are excluded.

“We continually develop and adapt our funds to match our customers’ expectations. That is why we have decided to remove companies that work in the field of fossil fuels from our six index funds that have a goal of reducing CO2 emissions,” says Robert Mikkelstrup, CEO at Danske Invest.

What are fossil fuels?

 
Definition Activity Threshold
Fossil fuel is any of a class of hydrocarbon-containing materials of biological origin occurring within Earth’s crust that can be used as a source of energy. Fossil fuels include coal, petroleum, natural gas, oil shales, bitumens, tar sands, and heavy oil. Exploration

Production

Refining

Transportation

Storage

Energy equipment & services
5 percent of revenue

In July 2021, Danske Invest altered six index funds by changing their benchmark. The new benchmark, called the EU Climate Transition Benchmark (CTB) has a goal of achieving lower CO2 emissions than the broader benchmarks. The change meant that the funds got a sustainable investment objective: reduction of CO2 emissions.

The benchmark is based on the objectives of the Paris Agreement and is prospective. The funds that follow the index will, among other things, receive an annual reduction of 7% in CO2 emissions in the portfolio. If a company does not meet the criteria for the index, the weighting of the index will be reduced and the company may eventually be phased out.

“We continue to believe that as an investor we play an important role in the transition to a more sustainable society, as we can put pressure on companies to move in a more sustainable direction. At the same time, this means that we must accept a transition phase,” says Robert Mikkelstrup.
 

What is the impact on you as an investor?

The adjustment to the funds will begin on 17 March 2022. The percentage of fossil fuels is very small and we do not expect that the change will result in increased costs, and the funds’ risk profile will stay the same.
 

What about Russian equities?

Due to the closure of the Russian stock market, it is not currently possible to sell the Russian fossil fuel companies. These companies are part of the funds Global AC and Global Emerging Markets, but the total weight is only 0.1%. The companies will remain in the two funds until trading in Russian equities is possible.
 

The six funds

Name ISIN
Europe Restricted - Akkumulerende, klasse DKK W DK0060607570
Global AC Restricted - Akkumulerende, klasse DKK W DK0060607737
Global Emerging Markets Restricted - Akkumulerende, klasse DKK W DK0060608032
Japan Restricted - Akkumulerende, klasse DKK W DK0061077104
Pacific incl. Canada ex Japan Restricted - Akkumulerende, klasse DKK W DK0060608545
USA Restricted - Akkumulerende, klasse DKK W DK0060608628


This publication has been prepared as marketing communication and does not constitute investment advice.

Please note that historical return and forecasts on future developments are not an indication of future return, which can be negative.

Always consult with professional advisors on legal, tax, financial and other matters that may be relevant for assessing the suitability and appropriateness of an investment.

Please refer to the prospectus and the key investor information before making any final investment decision. The prospectus, the key investor information for the fund and information regarding complaints handling (investor rights) can be obtained in English at danskeinvest.lu by clicking on "our funds" -> choose the relevant fund overview -> click on relevant fund -> click on "documents".

Danske Invest Management A/S may decide to terminate the arrangements made for the marketing of its funds.

For more information on the sustainability aspects of the fund, please refer to danskeinvest.lu by clicking on "our funds" -> choose the relevant fund overview -> click on relevant fund -> click on "documents" and click on ”sustainability-related disclosure”.

The decision to invest in the fund should take into account the sustainable investment objectives of the fund as described in the prospectus.

 

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