Danish industry-wide pension fund PKA, which has assets of more than E12bn, has recently adjusted its ethical guidelines for the fund’s investments.
But this is certainly not the first time that ethical investment has been on the fund’s agenda – PKA has worked with ethical aspects of its investments for more than 20 years. The first series of guidelines were drawn up around 1995. Most of this has been due to discussion with the fund’s members.
“We have now put it into a clear, new framework,” says Peter Damgaard Jensen, CEO of the fund. The fund has hired UK ethical investment research service EIRIS to analyse companies’ activities, so that it can be certain that its ethical guidelines are being applied.
PKA says investing ethically has not so far dented the return rate achieved by the fund. Last year it was around 15%, and over the last 10 years, it has been on average close to 9%.
“I think companies that handle ethical risks in a proper way minimise their risks,” says Damgaard Jensen. “And if companies minimise their risks they tend to have a better future in many ways. We think that in the long run, they won’t end up in so many big disasters as companies who don’t care at all.”
The guidelines consist of four main points:
q The pension fund will not invest in companies that violate the UN’s convention on human rights and labour rights, the environment and corruption. The principles of the UN’s Global Compact are to be used as a benchmark;
q The fund will not invest in companies that manufacture weapons. Sub-contractors are not included in this – it is the companies’ core activities that are at the centre of its focus;
q The fund will work actively to make investments which take both financial and ethical considerations in to account;
q The fund will carry out regular screenings of the investment portfolio and the board will receive regular up-to-date information on the outcome.
The Global Compact is a set of 10 key principles drawn up by the UN, and specifically aimed at companies. They are based on the Global Declaration of Human Rights, International Labour Organisation’s declaration on fundamental employee rights and the Rio declaration on the environment and development.

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