Choose your sustainability focus

Both investment methods promote environmental and/or social characteristics and ensure good governance practices. This means that they comply with the disclosure requirements under Article 8 of the EU Sustainable Finance Disclosure Regulation.

In the terms and conditions, you can for example read more about the overall sustainability focus of the investment methods, how they promote environmental and/or social characteristics, and how sustainability risks are taken into consideration alongside other relevant risks in the selection of the underlying investments. Please find the document here (in Danish only).

In the document ‘Tillæg om bæredygtighedsforhold i Danica Balance’, which is a supplement to the investment products’ terms and conditions, you can find more details about the specific sustainability focus and metrics of the investment methods. Among other things, this document details the proportion of sustainable investments, the criteria for exclusion of companies and how the investment methods focus on selecting investments with sound sustainability practices. Please find the document here (in Danish only).

In the document Website Disclosure – Danica Balance, you can find further information about how the methods promote environmental and/or social characteristics and how this is continuously monitored and analysed. Please find the document here (in Danish only).

Both Danica Balance and Danica Balance Responsible Choice promote environmental and social characteristics and ensure good corporate governance. This means that there is a focus on selecting investments that demonstrate sound sustainability practices. One way this is achieved is by investing in companies that manage their climate-related issues and that take the environment into consideration. It can also be by investing in companies that focus on good working conditions for employees or minimising resource consumption, or companies that are managed and run responsibly. We also analyse and take into consideration sustainability risks when we select investments. By including this – alongside other financial risk factors – we are able to identify sustainability-related factors that can affect the return on your investments.

Read more here

When investments are selected, a minimum of 10 percent of the underlying investments in Danica Balance will be sustainable investments. In Danica Balance Responsible Choice, a minimum of 75 percent of the underlying investments will be sustainable investments. This means that we have assessed the investments and they meet our criteria for making a positive difference for the environment, climate or social aspects, and that the investments contribute positively to one or more of the UN Sustainable Development Goals. Please note that if you would like to have a minimum of 75 percent sustainable investments, your entire pension savings must be placed in Danica Balance Responsible Choice.

The goal for Danica Balance and Danica Balance Responsible Choice is that all investments should be carbon neutral by 2050 at the latest in order to support the climate goals of the Paris Agreement. For both solutions, the carbon footprint of investments should decrease by up to 35 percent in five of the most climate-damaging sectors by 2025 (in Danish). In addition, over time, the investments must have a better carbon risk score than comparable investments. For this, we assess a company’s climate goals or its initiatives to reduce CO₂ emissions from its operations or for the entire value chain (from raw material consumption to disposal of the product). Also, investments that have a negative impact on the climate are excluded. Read more under ‘Exclusion of investments’.

In particular, Danica Balance Responsible Choice has the goal that the carbon footprint of its investments are lower than those of the financial markets in general.

We invest your pension savings in a wide range of companies around the world, and this provides us with the opportunity on your behalf to try to change the way these companies operate and behave. We do this by voting at the companies’ annual general meetings or by entering into dialogue with management – in both strategies, we endeavour to influence and encourage the companies to become more responsible and sustainable. Our goal is, for example, that the companies reduce their negative climate impact, adhere to the goals of the Paris Agreement, minimise the negative impact on the environment and biodiversity, create better working conditions for their employees, respect human rights, and avoid excessive remuneration of management. We exercise these active ownership strategies with the companies that we invest in, both through Danica Balance and Danica Balance Responsible Choice, and this is part of our efforts to promote environmental and/or social aspects.

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It is a key objective that your investments do not have a negative impact on the environment and society. Consequently, neither Danica Balance nor Danica Balance Responsible Choice invests in companies and countries that have a significant negative impact on the climate, demonstrate unethical behaviour or are involved in reprehensible activities. This means that you do not invest in companies or countries that have significant involvement in coal, tar sands, or tobacco. Nor do you invest in companies that are involved in controversial weapons or that contravene international norms and conventions. Read more.

In addition, Danica Balance Responsible Choice does not invest in companies involved with fossil fuels, gambling, alcohol, military equipment or pornography. This is due to the heightened focus that Danica Balance Responsible Choice has regarding sustainable investments. Read more.

Responsible investments incorporate and take into consideration environmental, social and governance (ESG) factors when selecting and excluding investments, which supports the objective of delivering attractive returns while at the same time showing consideration towards society. These factors are also included in active ownership activities, which involve entering into dialogue with companies to encourage them to develop and move in a more responsible direction. You can read more about how Danica works with responsible investments here.

There is no widely recognised definition of what constitutes a sustainable investment. We define it as investment in companies whose products and solutions in combination with their operations and manufacturing processes make a positive contribution to one or more of the UN Sustainable Development Goals and do not have a significant negative impact on society. Read more in the section ‘sustainable investments’ at the top of this page.

The proportion of sustainable investments in Danica Balance is a minimum of 10 percent, whereas the proportion of sustainable investments in Danica Balance Responsible Choice is much higher at a minimum of 75 percent.

Our goal is that Danica Balance Responsible Choice delivers attractive returns, and we are working to ensure a sound level of risk diversification and optimal management of the investments. This means, for example, that we also invest in shares or bonds in companies from emerging markets (such as Latin and Central America, Eastern Europe or Asia) or in companies that are not stock exchange listed. With these types of investments, there can be challenges in validating the information about a company’s activities, production methods, energy consumption, working conditions, management, general behaviour and more. We require this information in order to evaluate with sufficient certainty whether the companies live up to our criteria for sustainable investment. We are constantly working to obtain better data about the investments. However, we always ensure that the remaining investments as a minimum do not counteract the sustainability focus of Danica Balance Responsible Choice and that they do not have a significant negative impact on society.

Because Danica Balance Responsible Choice has an increased focus on sustainable investments and excludes a wider range of investments, it cannot provide the same investment diversification and risk spread as Danica Balance. This means that the expected return with Danica Balance Responsible Choice will be slightly lower than with Danica Balance for the same risk level and investment strategy. In practice, however, returns may be higher, equal or lower for certain periods of time.

View the return for Danica Balance here (in Danish) and for Danica Balance Responsible Choice here (in Danish).

The investment costs for Danica Balance and Danica Balance Responsible Choice are roughly the same. The difference depends on factors such as your risk profile and how many years you have left until you retire. So it usually does not cost more to have a higher proportion of sustainable investments.

When your Balance guarantee applies, you invest in Danica Pension Offensiv and/or Danica Pension Offensiv Responsible Choice as well as in one or more special bond funds with differing interest rate sensitivities. If you invest in Danica Balance, you can have investments in the following bond funds:

• Danica Pension Korte Obligationer (short-term bonds)
• Danica Pension Lange Obligationer (long-term bonds)
• Danica Pension Ultralange Obligationer (ultra-long-term bonds)

If you invest in Danica Balance Responsible Choice, you can have investments in the following bond funds:

• Danica Pension Korte Obligationer Responsible Choice (short-term bonds)
• Danica Pension Lange Obligationer (long-term bonds)
• Danica Pension Ultralange Obligationer (ultra-long-term bonds)

Danica Pension Korte Obligationer Responsible Choice invests exclusively in short-term sustainable bonds. The other three bond funds invest primarily in traditional government bonds and mortgage bonds. We do not have variants of Danica Pension Lange Obligationer and Danica Pension Ultralange Obligationer with sustainable bonds because the supply of sustainable bonds is currently insufficient to allow us to manage sustainable variants of these funds in an expedient manner. For this reason, we continue to invest in traditional bonds in Danica Balance Responsible Choice.