Danish ICMIF member LB Forsikring says that the DKK 8 billion that it has invested must, in future, be invested with even greater consideration for the climate, so that the member-owned insurance company, through its investments, does its part to limit the world’s CO2 emissions. This is the heart of the new climate strategy that LB Forsikring announced it had adopted last week.

“For a long time, our investments have been moving in a more climate-conscious direction, and now we are stepping up the pace. We will invest future-proof and live up to a global temperature rise of a maximum of 1.5 degrees in 2030. It is our way not just to back the Paris agreement, but to say we want to go to Paris,” said Jan Kamp Justesen, CFO in LB Forsikring.

Justesen continued: “We do this because we want to and because we think it’s the right thing to do. We are a member-owned insurance community and we are built on a desire to take care of each other and the community. It is part of our foundation that we behave properly, take responsibility and help where we can. It is also for us to actively participate in the climate agenda.

Although climate strategies have often been on the agenda in the financial sector, green investment targets have mostly been something where the major investors, on behalf of pension companies, have defined targets. However, Jan Kamp Justesen hopes that LB Forsikring’s climate strategy can inspire other small and medium-sized financial industry investors.

The “good 8 billion”

“We have investments of just over DKK 8 billion, and even though we are not the biggest investor in the financial sector in Denmark, it is still a lot of money, and it therefore matters what we invest in. For us, our members and society. That is why we want to raise the bar for how we invest,” says Jan Kamp Justesen.

Investments must either be developed or wound up

LB Forsikring’s climate strategy has four concrete ambitions for its investments towards 2030. The first ambition is to have more of the investments that actively absorb CO2 from the atmosphere, or which focus on a green transition, such as forests, green infrastructure or sustainable properties.

“We have set ourselves an ambition to have 20% sustainable and impact investments by 2030, and today we have almost 10% in the portfolio,” says Jan Kamp Justesen.

The other ambitions will require a lot more work both from LB Forsikring and their investment managers when the investments are to be selected, but also from the companies that are invested in.

“We believe that we get the farthest by influencing and developing our investments in the right direction. We have seen several examples of companies being able to adapt and move their business away from fossil fuels and towards more sustainable solutions. That transformation only succeeds if you as an investor are willing to invest, so there is capital to complete the transformation,” says Jan Kamp Justesen.

He continues: “With maximum limits for fossil investments and divestment of traditional investments by managers for more fossil-free alternatives, we have focused on the area since 2016. In 2020, approx. 1% of our investments in shares and credit bonds in companies. We are now sharpening that track, and we demand that the companies that operate within our maximum limits must have a strategy for green conversion.”

LB Forsikring’s strategic climate goals:

LB Forsikring says its investments must live up to the Paris Agreement to limit the global average temperature to well below 2 degrees and a maximum of 1.5 degrees by 2030.

The four ambitions that will help the mutual to reach this goal are:

• 20% sustainable and impact investments in 2030
• 40% ESG investment in 2030
• Phase out fossil investments in 2030
• 40% reduction in CO2 footprint by 2030