What does Danica Balance Responsible Choice invest in?

With Danica Balance Responsible Choice, your pension savings are invested with a more targeted focus on promoting sustainable progress. A minimum of 75% of the investments in Danica Balance Responsible Choice meet out criteria for sustainability. In brief, these are investments that in our assessment seek to contribute to one or more of the UN Sustainable Development Goals – while still working to secure you an attractive return on your investments. In practice, each investment’s contribution to the UN Sustainable Development Goals is different.

Investments may include companies whose products and solutions in combination with their operations and manufacturing processes are seeking to solve global challenges related to climate, food production, the environment and health. This means that we take into consideration both what the company produces and how it produces its product. On the basis of an overall evaluation, we assess whether the company is making a sufficient contribution to the UN Sustainable Development Goals.

At the same time, we aim to ensure that your investments do not cause significant harm to society. In support of this ambition, we do not invest in companies in a wide range of sectors such as alcohol, fossil fuels, military equipment and tobacco; nor do we invest in companies that contravene labour rights, cause significant damage to the environment or are involved in corruption.

How we select investments

Danica Balance Responsible Choice invests in a range of investment funds that from a risk-perspective are the same as the funds invested in by Danica Balance but which have an increased focus on sustainability aspects.

To achieve the same level of risk as the regular investment opportunities in Danica Balance, Danica Pension Mix Responsible Choice and Danica Pension Defensiv Responsible Choice include a slightly higher proportion of share investments than the equivalent funds in Danica Balance. The figure below shows the investment mix for the three primary funds in Danica Balance Responsible Choice: Danica Pension Offensiv Responsible Choice, Danica Pension Mix Responsible Choice and Danica Pension Defensiv Responsible Choice.

Danica Pension Offensiv Responsible Choice

Danica Pension Mix Responsible Choice

Danica Pension Defensiv Responsible Choice

Danica Pension Offensiv
Responsible Choice

Danica Pension Mix
Responsible Choice

Selects investment in different ways

The investments in Danica Balance Responsible Choice comprise different types of investments across different geographic regions. This means that you spread your risk and can receive an attractive long-term return in relation to your chosen risk profile.

Shares
Actively selected shares
Shares from an index

Bonds with a sustainable focus
Green bonds
Social bonds

Corporate bonds
Investment Grade corporate bonds
High yield corporate bonds
Emerging Market Debt

Alternative investments
Investments in projects with a focus on renewable energy

See the list of investments

Learn more about the types of investment

Investments in shares are carried out in two ways:
Selecting investee companies
Our ambition is to select companies that are striving to make a positive contribution to the sustainable transition through their products and solutions and through their own business operations. How and to what extent sustainability-related issues are promoted differs from company to company, and this often depends on how far a company has progressed in transitioning its business model. Such investee companies can include those that are focused on improving health, creating greater social equality, or creating better access to education. Focus can also be in the form of promoting sustainable food production, working with renewable energy or climate-change mitigation, ensuring clean water, or working to minimise the consumption of resources in the production of goods or provision of services.
To ensure a sound diversification of investment risk, we may also invest in companies that do not have a specific contribution towards the sustainable transition. But we aim to select companies that adhere to sound sustainability practices and that do not cause significant harm to the environment and society.
Following a carbon reduction-focused index
Investments are placed in a broad range of companies via a share index in order to ensure you a sound spread of risk. These investments follow an EU Paris-aligned benchmark, the framework of which has been set by the European Commission. The objective behind this benchmark is to construct investments that can support the Paris Agreement’s targets of limiting global warming to 1.5°C.
Overall, the companies in the index must have a weighted average carbon intensity that is at least 50% lower than that of the financial market in general and should comprise an equivalent proportion of the most energy-consuming sectors as the general market. The total carbon intensity of the companies in the index must decrease by a minimum of 7% per year, in alignment with the targets of the Paris Agreement.
This means that the carbon emissions reduction is achieved by selecting the companies that have the lowest emissions across sectors and not merely by selecting companies from sectors that naturally have low levels of carbon emissions. This also means that each company is selected not on the basis of specific carbon emission requirements but by considering the companies as a collective unit that must meet the benchmark's requirements.
This may include so-called green bonds, which can be issued by sovereign countries or by international organisations such as the World Bank. The money from green bonds is earmarked to finance initiatives to improve a country’s environmental or climate footprint. For example, the money is used to finance state expenditure on and investments in wind and solar energy, waste and wastewater management, improved energy efficiency of buildings, climate-proofing of urban settlements, or the green transition of the transportation sector.

These can also be social bonds (which are for example issued by the World Bank) that finance activities aimed at reducing poverty and increasing shared prosperity. Social bonds support improved opportunities for education, better access to food and housing, health initiatives, or increased financial security.
This covers European companies with high and low credit ratings and companies in developing countries. This can include investment in companies that for example have an ambition to support the green transition, increase the reuse or recycling of materials, or minimise water consumption. How and to what extent sustainability-related issues are promoted differs from company to company, and this often depends on how far a company has progressed in transitioning its business model.
In addition, there can be investments in green bonds or social bonds issued by companies. These bonds are targeted towards the financing of a company’s climate initiatives, for example improved energy efficiency of manufacturing facilities or the development of medicine specifically developed to cure illnesses in low-income countries.
Bond investments can also include companies that do not have a specific contribution towards the sustainable transition. But we aim to select companies that adhere to sound sustainability practices and that do not cause significant harm to the environment and society.
This comprises investments in shares, loans or bonds in projects or companies that are not stock exchange listed. This can include investments in infrastructure funds that focus on green energy, for example wind farms and solar farms in Europe and the USA. It also includes investment in the Swedish company Northvolt, which as one of Europe’s largest producers of batteries for electric vehicles plays a central role in supporting the green transition of the transportation sector. Northvolt also produces batteries that store energy so that electricity produced by wind energy, for example, does not go to waste.

What do you not invest in with Danica Balance Responsible Choice?

Danica Balance Responsible Choice excludes a range of companies, countries and sectors, and your pension savings will not be invested in these. These are those that are involved in the following:

Alcohol
Certain types of companies that derive more than 5 % of their revenue from alcohol. Such companies include breweries, distilleries and bars/nightclubs.

Breaches of norms
Certain companies that exhibit harmful behaviour or are involved in problematic activities. For example, companies that violate human rights, pollute water, damage biodiversity, contribute to climate change or are involved in corruption.

Fossil fuels
Companies that derive more than 5 % of their revenue from the production, distribution, processing, transportation or storage of fossil fuels such as coal, oil, gas, bitumen or tar sand – including equipment related to these fuels.

Gambling
Certain types of companies that derive more than 5 % of their revenue from gambling. This applies to betting companies, casinos and lottery providers.

Controversial weapons
Certain types of companies involved in controversial weapons such as cluster bombs, anti-personnel mines, biological and chemical weapons, nuclear weapons outside the Non-Proliferation Treaty, ammunition made with depleted uranium, or ammunition that uses white phosphorus.

Military equipment
Certain types of companies that derive more than 5 % of their revenue from military equipment. This includes the production of tanks, munitions, missiles and radar, software and surveillance equipment modified for military use.

Pornography
Certain types of companies that derive more than 1 % of their revenue from the production, distribution, or showing of pornography.

Tobacco
Certain types of companies that derive more than 5 % of their revenue from the cultivation, processing or production of tobacco products, including leaf tobacco products, electronic cigarettes and snus/nicotine pouches.

Selected countries
Government bonds issued from countries on sanctions lists with the UN, EU, USA, UK or Denmark. In addition, countries that face particular issues – such as those related to human rights violations, corruption or lack of rule of law – are excluded.

See excluded investments

See more details about the restriction criteria

The limit is higher than 0% because there is some uncertainty in determining the revenue from a company’s activities. For example, in the case of fossil fuels, there is a market standard of 5%. The standard is set so that your pension savings are not invested in companies that have significant fossil fuel activities.

This prevents the exclusion of companies that have minimal activities within the fossil fuels sector and whose turnover is derived from activities other than fossil fuels.

What investment strategies can I choose from?

With Danica Balance Responsible Choice, you can choose the same investment strategies as with Danica Balance. Read more about the investment strategies here. The choice of how large a proportion of your pension saving you want to place in Danica Balance Responsible Choice is entirely yours.

What sort of return can I expect?

Because Danica Balance Responsible Choice has an increased focus on sustainable investments and excludes a wider range of investments, it does not provide you with the same investment diversification and risk spread as Danica Balance. This means that the expected return with Danica Balance Responsible Choice will be slightly lower than with Danica Balance for the same risk level and investment strategy. In practice, however, returns may be higher, equal or lower for certain periods of time

View the return for Danica Balance here (in Danish only) and for Danica Balance Responsible Choice here (in Danish only).

Mix high risk profile

The figures show the expected return for Danica Balance Responsible Choice and the expected return for the regular Danica Balance with an equivalent risk profile. These figures show a theoretical projection of the return based on the Danish Council for Return Expectations’ current predictions for the general development in the markets. The actual return can be higher, the same or lower.
Mix Medium risk profile

The figures show the expected return under Danica Balance Responsible 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

The figures show the expected return under Danica Balance Responsible 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.

When your Balance guarantee applies, you invest in Danica Pension Offensiv and/or Danica Pension Offensiv Responsible Choice as well as in one or more special bond funds with differing interest rate sensitivities. If you invest in Danica Balance, you can have investments in the following bond funds:
- Danica Pension Korte Obligationer (short-term bonds)
- Danica Pension Lange Obligationer (long-term bonds)
- Danica Pension Ultralange Obligationer (ultra-long-term bonds)
If you invest in Danica Balance Responsible Choice, you can have investments in the following bond funds:
- Danica Pension Korte Obligationer Responsible Choice (short-term bonds)
- Danica Pension Lange Obligationer (long-term bonds)
- Danica Pension Ultralange Obligationer (ultra-long-term bonds)
Danica Pension Korte Obligationer Responsible Choice invests exclusively in short-term sustainable bonds. The other three bond funds invest primarily in traditional government bonds and mortgage bonds. We do not have variants of Danica Pension Lange Obligationer and Danica Pension Ultralange Obligationer with sustainable bonds because the supply of sustainable bonds is currently insufficient to allow us to manage sustainable variants of these funds in an expedient manner. For this reason, we continue to invest in traditional bonds in Danica Balance Responsible Choice.
No more than 25% of the investments in Danica Balance Responsible Choice are investments that we do not assess as being sustainable investments. However, we strive to ensure that those investments adhere to sound sustainability practices, do not counteract the ambition to promote sustainable progress or cause significant harm to the environment and society. These investments may include companies in South America or Asia, which we invest in to achieve reasonable diversification of your investments and risk. The purpose of these investments is to contribute to generating attractive returns relative to your chosen risk profile. Because complete information about these types of companies is lacking, we are unable to conclude with certainty that such investments make a sufficiently positive contribution towards the UN Sustainable Development Goals.

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