Denmark’s pension and insurance lobby says Europe’s moves to bolster defence need help from the pension industry, but politicians must make it more legitimate for pension funds to invest in this sector.
Following the European Commission’s launch yesterday of its European Defence Industrial Strategy, Insurance & Pension Denmark (IPD) said: “Investments from private individuals, including the pension industry, are an important part of the solution.”
Danish pension companies were ready, IPD said, but added that more political action was needed to make it more legitimate to invest in this sector.
Tom Vile Jensen, deputy director of IPD, said: “The EU Commission emphasises that a strong defence industry is essential to guard against the threats that the countries are experiencing right now”.
He said the official report compiled under the chairship of Danish diplomat Michael Zilmer-Johns in September 2022, which analysed the status and conditions around Danish security and defence looking ahead towards 2035, had demonstrated the same gloomy picture, and that significant investments were required to build both the armed forces and a defence and security industry that could match the new threats in a credible way.
But Vile Jensen said there was some caution when it came to investment in defence and security.
“Now the EU Commission is stating that sustainability regulation does not stand in the way of investing in the defence industry,” he said.
IPD said several Danish pension companies had already signed up to participate in, for example, the operation and expansion of Danish army buildings and the upgrading of the Danish naval fleet, with some providers also having invested in defence and security companies.
“It is obvious we should look at how we can best solve the tasks together across all the skills, resources and capital we have as a society,” Vile Jensen said.
“At IPD, we have made it clear that the pension companies are welcome to cooperate with both the armed forces and invest in the defence industry, but that it is entirely up to each individual company to decide,” he said.
Vile Jensen said the European Commission had pointed out that investors might be withholding investment in the defence sector unnecessarily due to concerns about European sustainability regulation and reputational concerns.
“If politicians are to succeed in raising much more capital from private investors, further targeted measures will probably be needed in the EU and Denmark to create a greater acceptance of and understanding of the investments,” the IPD deputy director said.
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