Denmark’s biggest pension fund is reversing blacklistings of major aerospace and defence companies such as Airbus and Boeing to allow it to invest in a broader range of busineses in the sector, referencing a changed world and the need for Europe to handle its own security.
The DKK700bn (€94bn) Copenhagen-based pension provider announced yesterday that it was relaxing some of its responsible investment rules to allow the inclusion of more defence-related equities, while other rules around defence would remain in force.
Around 10 companies were coming back into the investment universe, it said, including large European firms such as Airbus, Thales, and BAE Systems, as well as Boeing in the US – all businesses which had previously been excluded by PFA because they did not comply with its responsible investment policy.
Rasmus Bessing, head of responsible investment at PFA, said: “The world has changed significantly since Russia’s invasion of Ukraine, and there’s a growing understanding both here and in Europe that we need to invest more in defence so we can take better care of our own security.”
He said PFA had so far had a policy of not investing in companies producing components for nuclear weapons.
“This has prevented us from investing in a number of well-known companies within the defence and aviation industries, such as the companies Airbus, Boeing and Dassault Aviation, where only a very small part of the revenue comes from parts for nuclear weapons,” he said.
“Just as there are customers who think it’s irresponsible to invest in weapons, there are others who think it’s irresponsible not to do so”
Rasmus Bessing, head of responsible investment at PFA
However, Bessing said many arms firms would remain on PFA’s exclusion list, for example, businesses involved in the production of unconventional weapons such as cluster munitions, biological or chemical weapons, or companies that otherwise violated global norms or PFA’s guidelines for responsible investments.
PFA said that although its decision to increase opportunities to invest in defence was “in line with global developments”, it also acknowledged that the topic was fraught with dilemmas.
“Just as there are customers who think it’s irresponsible to invest in weapons, there are others who think it’s irresponsible not to do so,” Bessing said, adding that PFA customers wanting to avoid defence stocks could do so via the provider’s Climate Plus pension product.
The news follows an announcement by PFA’s peer Danica – the pensions arm Danske Bank – on 1 April that it was adjusting its investment framework to make it possible to invest in more defence companies that supplied key components for the expansion of European defence and security.
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