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Status on phase-in of new policy on fossil fuel companies in our investment products

Last year, Danske Bank announced the introduction of a new policy on investments in companies operating in the fossil fuel sector, and the adjustment of investment portfolios is well under way.

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In February 2024, we announced our introduction of a new policy for our asset management activities in Danske Bank Asset Management and Danica covering investments in fossil fuel companies. As planned, we are now in the process of gradually phasing in the policy across our portfolios.

In relation to companies in the fossil fuel sector, the majority of our portfolios will in future focus only on investment in companies that have credible plans to transition towards a more sustainable society and to future-proof their business.

“The policy reflects the preferences of the majority of our customers and our commitment to delivering competitive returns on a responsible basis”, says Erik Eliasson, Head of Responsible Investment at Danske Bank.

To accommodate different customer preferences and other factors across markets, selected Danske Invest funds are, however, not covered by this policy, just as we also have investment funds that completely exclude fossil fuel companies.


The implementation of such a policy is a complex task, which among other things requires a solid foundation of data, prospectus updates and approval processes with authorities. At the same time, it’s crucial that we at all times endeavour to make the best decisions on behalf of our investment customers. That’s why it this isn't something that can just be implemented from one day to the next.

Erik Eliasson

Head of Responsible Investment, Danske Bank



A new model for assessing companies
Fossil fuels still account for around 80% of the world’s energy supply, and the International Energy Agency (IEA) believes that fossil fuels will continue to be part of the global energy supply and the economy towards 2050 as we gradually transition to renewable energy.

At Danske Bank, we will continue – for most of our portfolios – to have investments in companies in the fossil fuel sector, thereby reflecting the global economy and global energy supply. However, as we move forward, we will screen fossil fuel companies and their transition plans using a new ‘Net Zero Pathway Framework’ model, which is primarily built upon data and methodologies from the Transition Pathway Initiative (TPI). This screening will be the basis for determining whether a company may be included in the investment funds etc. that are covered by our policy.

We have carried out a comprehensive amount of analysis work prior to making adjustments to our investment portfolios.

“The implementation of such a policy is a complex task, which among other things requires a solid foundation of data, prospectus updates and approval processes with authorities. At the same time, it’s crucial that we at all times endeavour to make the best decisions on behalf of our investment customers. That’s why it this isn't something that can just be implemented from one day to the next,” explains Erik Eliasson.


Our exclusions of companies are not static and can change as the companies change and develop. We continually assess all companies in our portfolios to ensure that our customers get the best possible returns within the framework of Danske Bank’s Responsible Investment Policy – and of course this also applies to our investments in companies in the fossil fuel sector. 

Thomas Otbo

Chief Investment Officer, Danske Bank Asset Management



A natural part of ongoing optimisation
Our policy on fossil fuel companies will result in our divestment of a number of fossil fuel companies from our portfolios, but it will also lead to us increasing our investment in other companies in the sector. Overall, we expect our exposure to fossil fuel companies to remain relatively unchanged over the short term.

This is according to Thomas Otbo, Chief Investment Officer at Danske Bank Asset Management.

“The biggest difference is that we have become even more selective in our investments and that we primarily focus on fossil fuel companies that are working to future-proof their business in relation to the challenges and needs of the coming decades. We believe that we serve our investment clients best through this approach,” says Thomas Otbo.

He considers the implementation of the policy a natural part of the ongoing adjustment and optimisation of customer portfolios, and he stresses that the policy in practice applies to only a minor part of the total investments in our asset management activities.


New policy implementation entails a comprehensive process

The phasing in of our new policy on investments in companies in the fossil fuel sector is a comprehensive process that needs to ensure that we look after our customers’ interests in the best possible way. The process includes the following steps:

  • Development and approval of the overall framework for screening of fossil fuel companies
  • Development of the framework for regular reporting on exclusions of companies
  • Updating of relevant fund prospectuses, investment guidelines etc.
  • Updating our framework for our active ownership work
  • Internal and external approvals, including from relevant financial regulatory authorities, boards of directors of underlying funds etc.
  • Adjustment of portfolio investments in our investment products


Companies are subject to continual assessment
Most of the adjustment of our portfolios is expected to be completed by the autumn of this year.

“The changes will be implemented at different speeds across our many different investment solutions. For some of our Danske Invest funds, it is a requirement, for example, that the underlying funds’ prospectuses are changed and are approved by local financial regulatory authorities before we can adjust our portfolios, whereas for other funds, approval is required from the board of directors of the funds,” explains Thomas Otbo.

For investment-related and regulatory reasons, we cannot disclose which companies we are selecting or excluding in our portfolios during the phase-in of the policy. Furthermore, this can change over time.

“Our exclusions of companies are not static and can change as the companies change and develop. We continually assess all companies in our portfolios to ensure that our customers get the best possible returns within the framework of Danske Bank’s Responsible Investment Policy – and of course this also applies to our investments in companies in the fossil fuel sector. With fewer different fossil fuel companies in our portfolios, we can also better target our active ownership efforts, which we regularly employ to encourage the companies in our portfolios to move in a positive direction that creates the most value for our investors,” says Thomas Otbo.

After the adjustment of our portfolios, we will publish updated restriction lists.