Denominator & Matter | DEI analysis of danish pension funds

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Aurora Ferreira. Unsplash.

Denominator and Matter joined forces to provide transparency on how Denmark's 12 largest pension funds invest through a DEI lens
All analyzed funds allocate resources to companies in the bottom 25% of DEI performance, with significant investments in worst performers across Race/Ethnicity (~92 billion DKK) and Gender (~97 billion DKK).
DEI investment patterns vary widely, with differences of up to 8x between funds, emphasizing the impact of pension fund selection on DEI outcomes.

Ever wondered how the retirement funds in Denmark are invested from a Diversity, Equity, & Inclusion (DEI) perspective? In cooperation with Matter, Denominator has analyzed the 12 largest Danish pension funds investments. Key insights from the report:

Investments in worst performing companies: All pension funds exhibit exposure to DEI bottom quartiles, meaning they invest in the 25% worst performing companies relative to their country peers from a DEI perspective, across several DEI dimensions.
Gender: 97 billion DKK is invested in companies without any women in either executive team or board of directors. This equals to ~15% of the analyzed pension funds total equity investments.
Portfolio exposure to varies by DEI dimension: Investments in the worst performing companies vary across DEI dimensions. The highest investments in worst performers are found within Race/ethnicity and Executive diversity. The lowest investments in the worst performers are found in the Disability dimension.
Race/Ethnicity: ~92 billion DKK is invested worst performing companies from a Race/Ethnicity perspective
Differences among Danish pension funds: Investments in worst DEI performing companies vary between Danish pension funds with factors from 1.38x to 8x, depending on the DEI dimension. E.g., if a Danish woman wants to limit her retirement funds to companies underperforming on Gender, she then risks a 5x difference in performance, depending on which pension she selects (assuming freedom of choice, which is not always available in Denmark).

UN’s Principle for Responsible Investments (PRI) made DEI a separate focus area to consider within responsible investment in 2022. This new report provides transparency into how the 12 largest Danish pension funds have invested their members’ retirement savings from a DEI perspective. All pension funds considered in this analysis are PRI signatories.

‍The included pension funds are: · ATP· AkademikerPension· AP Pension· Danica Pension· Lægernes Pension & Bank· P+, Pensionskassen for Akademikere· PenSam· PensionDanmark· PFA· PKA· Sampension· Velliv