What do we invest in
under Danica Balance Sustainable Choice?

With Danica Balance Sustainable Choice, your pension savings are invested with a specific focus on sustainability. This means that we invest your savings in equities and corporate bonds from selected companies as well as in sustainable bonds and in alternative investments in areas such as renewable energy.

The investments are selected in various ways. We hand-pick corporate bonds and part of our equity investments from companies that are working to make a positive contribution to the climate, the environment, health, food production or other societal conditions, thereby supporting the UN’s sustainable development goals (SDGs). Such companies include those that are already best in their class in relation to their focus on sustainability as well as companies that still have some way to go but which are intentionally working to move steadily in the right direction.

Danica Balance Sustainable Choice also includes portfolios of equities in different geographical regions. Based on market indices for the various areas, we have selected those companies that show a willingness to adapt their business models and reduce their greenhouse gas emissions in line with the objectives of the Paris Agreement on Climate Change. At the same time, we deselect and remove companies that generally show weak performance on a number of different sustainability parameters.

We do not invest in companies that conduct activities associated with alcohol, fossil fuels, gambling, controversial weapons, military equipment, pornography or tobacco, nor do we invest in selected companies that, for example, face challenges in meeting accepted standards, norms and ethical practices.

How we select investments

Danica Balance Sustainable Choice invests in a number of investment funds that from a risk perspective are equivalent to the funds in our standard Danica Balance product but which have increased focus on sustainability.

To ensure the same level of risk as for the standard investment scenarios offered in Danica Balance, Danica Pension Mix Sustainable Choice and Danica Pension Defensiv Sustainable Choice include a higher proportion of shares/equity than the equivalent funds in the standard Danica Balance.

The figure below shows the investment allocation for the three primary funds in Danica Balance Sustainable Choice: Danica Pension Offensiv Sustainable choice, Danica Pension Mix Sustainable choice, and Danica Pension Defensiv Sustainable Choice.

 

Danica Pension Offensiv Sustainable Choice

Danica Pension Mix Sustainable Choice

Danica Pension Defensiv Sustainable Choice

Danica Pension Offensiv
Sustainable Choice

Danica Pension Mix
Sustainable Choice

Danica Pension Mix
Sustainable Choice

Shares
Actively selected equities
Equities from indices

Learn more

Sustainable bonds
Green bonds
Social bonds
Sustainability bonds

Learn more

Credit bonds
Investment grade corporate bonds
High-yield corporate bonds

Learn more

Alternative investments
Investments in projects with a focus on renewable and clean energy
Micro loans

Learn more

What do you not invest in under
Danica Balance Sustainable Choice?

In Danica Balance Sustainable Choice, we also exclude a number of companies that we do not invest in. This comprises companies involved in the following business areas:

 


Alcohol
Companies with 5% or more of their revenue generated from alcohol.


Norm-based restrictions
We may decide to implement investment restrictions against companies with questionable norms or ethical standards, or if our active ownership does not lead to positive changes over time.


Fossil fuels
Companies with 5% or more of their revenue generated from fossil fuels.


Gambling
Companies with 5% or more of their revenue generated from gambling.


Controversial weapons
Companies involved in controversial weapons. This includes cluster munitions, anti-personnel mines, biological and chemical weapons as well as nuclear weapons.


Military equipment
Companies with 5% or more of their revenue generated from military equipment.


Pornography
Companies with 1% or more of their revenue generated from pornography.


Tobacco
Companies with 5% or more of their revenue generated from tobacco.


Your investments under your general Danica Balance scheme are also subject to some of the above restrictions.

Learn more here (In Danish only)

 

It is the market standard to apply a 5% threshold for companies’ revenue generated from products or activities such as tobacco or fossil fuels. Revenue thresholds are used in, for example Swan eco-labelled investment funds or the climate group Ansvarlig Fremtid. The reason that the thresholds are higher than 0% is that the determination of revenue generated from activities is subject to some uncertainty.

A threshold of 5%, for example, has been accepted as the market standard because it ensures that we do not invest in companies with significant activities within fossil fuels, for example, while we avoid excluding companies that do not have significant activities in such areas and whose operations and revenue stem from an entirely different area.

What investment strategies can I choose from?

You can choose the same investment strategies under Danica Balance Sustainable Choice as under your general Danica Balance scheme. Learn more about our investment strategies here. It is up to you what percentage of your savings you want to place in Danica Balance Sustainable Choice.

What can I expect in terms of return?

In Danica Balance Sustainable Choice, we invest with an extra focus on sustainability and do not invest in companies, investments and asset types if they do not live up to our criteria. Investments are also deselected if we do not have enough data to assess the sustainability situation with a sufficient level of certainty. This means that we cannot currently achieve the same diversification of investments as we can with our standard Danica Balance.

Because of this, a lower return must be expected in Danica Balance Sustainable Choice in the short term, assuming unchanged investment risk, than in the standard Danica Balance. In general, we expect the difference to be greater for low-risk investments than for investments that have higher risk. In the long term, however, we expect the expected returns in the two versions of Danica Balance to become similar.

The Danish Council for Return Expectations regularly updates its official expectations for the risk and expected return of various investment types. Below are the expected returns for the standard Danica Balance and for Danica Balance Sustainable Choice, as based on the council’s expectations.

See actual returns here (In Danish only)

  • Mix high risk profile

    Mix high risk profile

    The figures show the expected return under Danica Balance Sustainable Choice and the expected return under your general Danica Balance scheme with the same risk profile. The figures illustrate a theoretical projection of the return based on the Danish Council for Return Expectations’ current expectations of general market developments. The actual return may be higher, equal or lower.




  • Mix Medium risk profile

    Mix Medium risk profile

    The figures show the expected return under Danica Balance Sustainable Choice and the expected return under your general Danica Balance scheme with the same risk profile. The figures illustrate a theoretical projection of the return based on the Danish Council for Return Expectations’ current expectations of general market developments. The actual return may be higher, equal or lower.

  • Mix low risk profile

    Mix low risk profile

    The figures show the expected return under Danica Balance Sustainable Choice and the expected return under your general Danica Balance scheme with the same risk profile. The figures illustrate a theoretical projection of the return based on the Danish Council for Return Expectations’ current expectations of general market developments. The actual return may be higher, equal or lower.

What if I have a guarantee on my savings?

You can choose Danica Balance Sustainable Choice even if you have a guarantee attached to your savings. However, if you have an active guarantee, you currently cannot access all the funds that have increased focus on sustainability.

When you have chosen the standard Danica Balance and your Balance Guarantee applies, you invest in Danica Pension Offensiv and one or more special bond funds with different interest rate sensitivity:

  • Danica Pension Korte Obligationer
  • Danica Pension Lange Obligationer
  • Danica Pension Ultralange Obligationer

We are able to provide you with a payment guarantee only if you have investment in these funds, which invest in traditional government and mortgage bonds.

However, the amount of sustainable bonds currently available is not yet sufficient to enable us to manage varieties of Danica Pension Lange Obligationer and Danica Pension Ultralange Obligationer with sustainable bonds in an appropriate manner, so in these cases we must continue to invest in traditional bonds in Danica Balance Sustainable Choice.

Nevertheless, the amount of sustainable bonds available is sufficient to enable us to offer a fund – Danica Pension Korte Obligationer Sustainable Choice – that invests exclusively in short-term sustainable bonds.