96% of the 50 largest institutional investors in Denmark now have a set-up for responsible investment compared to 88% in 2015. Active ownership or engagement is an essential element for two-thirds of these investors, according to a new study from the Dansif, the association of responsible investors in Denmark.

The report “The Current State of Responsible Investment in Denmark” is the most authoritative mapping of how and to what extent Danish pension funds, banks, mutual funds and business funds implement environmental, social and corporate governance issues (ESG factors) in their investment decisions. It is hard to find other countries with a similar coverage. However, there are significant differences, when it comes to how thoroughly the individual Danish investors are acting in the field.

Some investors still just publish a brief formal policy, a pragmatic strategy of including ESG factors, when it seems relevant, or an agreement with the asset managers to take care of everything that has to do with responsible investment, on their behalf. However, according to the new survey, the majority has stepped up their preparedness the last two years. Thus, more than nine out of ten of the respondents have involved top management and the board of directors in the ESG strategy and decisions. And although a large part of the operational functions is carried out by asset managers and other external advisory firms, more than 80% of the largest Danish investors have now at least one employee spending more than half of the working time on ESG issues. Barely 40% have two or more employees working with these issues.

Nearly 80% involve ESG factors when selecting the asset managers of listed equities. A similar trend can be observed for other asset classes such as real estate, infrastructure and government bonds. Particularly noteworthy is it that the proportion of investors with a clear process to handle government bonds in line with equities and corporate bonds has increased significantly, from 48% in 2014 to now 67%.

SDG’s and OECD Guidelines

According to the Dansif study, Danish investors still differ from investors in many other countries by focusing on norm-based screenings of their portfolios to indicate violations of international conventions and norms, typically combined with active ownership. 86% of these investors use the ten UN Global Compact Principles as a point of departure.


Several have also started to use the so-called “OECD guidelines for Responsible Business Conduct for Institutional Investors”. However, only 7% has taken new initiatives related to the guidelines since they were published in March this year, while 37% say they have been incorporating these recommendations for some time.

18% of the largest Danish institutional investors have also started to integrate the United Nations 17 Sustainable Development Goals (SDG’s) in their investments. Most, however, are still in the very preparatory stage to find the best strategies and ways to measuring the social and environmental “impact” of their investments, in parallel to the financial return of the projects.

The Danish institutional investors have been progressing especially when it comes to the SDG’s regarding climate change and clean energy. 41% are now measuring their “carbon footprint”, a significant increase from 13% in the previous Dansif study from 2015, and more than the average of PRI signatories in other countries. 44% of the Danish investors are conducting engagement specifically on climate change, compared to 25% two years back.

Increasing integration and active ownership

Previously, Danish investors were lacking behind investors in other countries regarding so-called “Integration” of ESG in their conventional investment analysis and strategies. But it has changed now, where 65% of the Danish investors declares that “Integration” is a part of their set-up, compared with 44% in 2015.

Integration is often combined with active ownership, either carried out as proxy voting at the general meetings or as ongoing engagement dialogues with the companies. 74% of the responding investors use external consultants for conducting the engagement, but there is an increasing tendency that the active ownership is also conducted by internal staff and investor networks. However, there are significant differences in the extent of the active ownership. Thus, while the typical number of engagement cases, handled by internal employees and investor-networks, are below 10, it is more than 100, when it is carried out by external engagement consultants.

The proportion of investors using proxy voting has also increased remarkably from 36% in 2011 to 75% in 2017. About a third of the Danish investors vote through external proxy voting companies, while half of the investors are advised by external advisors on what they should vote.

Finally, two-thirds of the largest Danish institutional investors do not inform the public about the outcome of their engagement.