“Full transparency about our efforts and investments”
This is the promise from Sampension to their 330,000 Danish pension customers.
But what you say is one thing, what you do is another.
At the end of 2022, Sampension’s total assets had a value of DKK 269 billion.
And one tenth of these investments, 26.3 billion kroner to be exact, are concealed.
The investments consist of different types of loans, and the recipients of these loans are not covered by Sampension’s transparency “for competitive or confidentiality reasons”.
The concealment causes offence at the Danish Consumer Council ‘Think’.
“You cannot have your cake and eat it too. You either have full transparency or you don’t. They will not account for every tenth krone invested, and I think that’s a lot,” says Jacob Ruben Hansen, economist at the Danish Consumer Council Think.
Customers cannot know what companies and projects are hiding behind the 26 billion kroner. Therefore, they cannot know whether their pension savings are being used to invest in controversial arms manufacturers or climate-damaging companies, for example.
“Many pension customers are concerned that their pension money is being put to good use, because we are saving a lot of money. And that is why it is important that we can trust what our pension fund tells us,” he says.
The 26 billion that Sampension is concealing consists of direct loans and so-called structured credits.
These are loans given to companies, among other things, but outside the listed market, where you find investments in the listed companies’ shares, for example.
Sampension manages the investments itself.
Lars Christian Ohnemus, Director of Center for Corporate Governance at CBS, believes that you cannot claim to have full transparency when 26 billion are not accounted for.
“10 percent is a relatively large allocation. In itself, it is not unusual that there is no transparency on individual positions when it comes to unlisted credits. There may be agreements with the borrowers that it is not disclosed for various reasons. But that is not full transparency, and then you either have to change the policy or structure your portfolio in a way that allows you to provide full transparency. This can be done, for example, by investing in unlisted credits through a fund,” he says.
Sampension recognises that there is lack of transparency about who is borrowing the many billions they have invested.
Even though that is what they have promised their 330,000 members, who include a number of public sector employees in state and municipalities, postal workers, architects and veterinarians.
However, Sampension’s ESG manager Jacob Ehlerth Jørgensen emphasises that they disclose figures for the total climate impact of their investments at sector level, and that these figures show that their credit investments overall have a relatively low climate impact.
In 2022, the total CO2 emissions from their credit portfolio were 298,000 tonnes of CO2 according to Sampension’s annual report.
“It is not about concealing black investments,” says the ESG manager.
But can you claim to be fully transparent about your investments when over 26 billion DKK are actually a black box?
“I think this can be done, as long as you provide figures for the climate impact where you cannot be fully transparent all the way down to the company level,” says the ESG manager.
However, the ESG manager would not rule out that the portfolio could include loans to controversial oil companies such as British BP, which has recently reduced its climate goals, or Norwegian Equinor, which plans to open new oil and gas fields in Arctic areas.
Could there be a BP in those 26 billion? Or an Equinor?
“In principle, this is possible. But our investments in energy companies in the credit portfolio are quite modest, and included in our carbon footprint, which is low.”
But surely you could emphasise the value of transparency and openness more, and thus invest less in markets where you cannot be transparent?
“It is not a realistic solution to cut yourself out of a market completely because you cannot be allowed to disclose individual positions. This is a problem that applies to many of the unlisted markets. It is about how to provide transparency in other ways,” says the ESG manager, who believes that Sampension’s 330,000 Danish pension customers can be proud of how their pension savings are managed.
“If I were a customer, I would look at the overall climate impact of the portfolio, and I would be proud of the development that has taken place at Sampension. Ultimately, it is a question of trust when it comes to the parts of the portfolio that we cannot fully disclose. But we really do make an effort to be as transparent as we can,” he says.
Providing aggregated figures for the climate impact of investments will not solve the problem of lack of transparency, according to the Danish Consumer Council ‘Think.
“It may well be that there are companies, which supply the upstream sector of the oil industry or which are suppliers to coal mines. We cannot know, and that is a problem,” says Jacob Ruben Hansen.
He emphasises that it is Sampension itself that has chosen to invest in a way that goes against their own promises of full transparency.
“It is not uncommon for pension funds to have unlisted assets in their portfolio. But then you have to specify what kind of assets you have. And if they believe they cannot provide insight into the assets, then they have to build a portfolio that matches their goal and values of full transparency. After all, it is their choice,” says Jacob Ruben Hansen from the Danish Consumer Council ‘Think.
