The IPCC has made it clear that urgent and powerful action is needed to reduce greenhouse gas emissions and save our livelihoods along with the diversity of plant and animal life.
KLP Ejendomme in Denmark is part of Norway's largest pension company, KLP. Therefore, our environmental efforts consist of both our daily work with, for example, energy optimisation in our properties, and the way we manage the value we create. Here, the environment has long been high on the agenda, and since 2018, KLP has had a goal of increasing climate-friendly investments worldwide by NOK 6 billion (approx. DDK 4.4 billion) each year. In 2020, this goal was exceeded by a good margin, as KLP invested a new NOK 8.8 billion (approx. DDK 6.4 billion) in climate-friendly investments.
Climate change is one of the biggest challenges facing the world, which is why KLP has an overarching goal to align its business with the 1.5-degree target of the Paris Agreement. If the world is to reach this goal, not only are emission cuts necessary, but we also need increased climate finance to realise the green shift both in Norway and the rest of the world. This is an area where KLP can make a special contribution. For several years KLP has built up a portfolio of climate-friendly investments, and in 2020 these increased by NOK 8.8 billion. NOK. At the end of 2020, KLP's climate-friendly investments totalled NOK 52.2 billion. NOK 52.2 billion, which corresponds to eight per cent of KLP's total investments. The fact that KLP has chosen to exclude companies and industries such as coal and oil sands has been an important step. At the same time, we are actively investing in what the world needs more of.
"There is a great need for increased climate finance to achieve the goals of the Paris Agreement, and KLP is one of the investors who are really investing in this. We have been doing this for several years, and it is one of the most important things we can do to help achieve the climate goals while ensuring a good return on pension funds. These investments are part of the green transition. It's something we want to do more of, so our climate-friendly investments will increase in the coming years," says Heidi Finskas, Director of Corporate Social Responsibility at KLP.
KLP has invested NOK 32.7 billion in renewable energy worldwide
A large part of KLP's climate-friendly investments are in renewable energy in Norway and around the world, totalling NOK 32.7 billion. NOK. Of this, NOK 23 billion has been invested in Norway. NOK 23 billion has been invested in Norway, including Norwegian companies that produce and distribute environmentally friendly energy. These are investments with a long-term perspective that ensure KLP a good return on pension funds and complement the portfolio well. Through its ownership in Norwegian power companies, KLP will be a driving force in upgrading the hydropower plants and improving the efficiency of the power plants.
In 2020, KLP invested directly in a Norwegian renewable project for the first time. The investment in the Nord-Odal wind farm has been controversial and has generated a lot of discussion and inquiries in a polarised debate. The need for more renewable energy is important, while at the same time balancing environmental and nature considerations. This balance is important to KLP. The wind energy plant in Nord-Odal fulfils WWF's criteria for the development of wind energy that takes care of nature.
KLP has also invested heavily in renewable energy in various parts of the world, including the United States. In 2020, KLP's investments contributed to the construction of a large solar park in Texas that produces 246 MW annually. This is equivalent to the energy needs of 34,000 Americans. KLP has invested in several different renewable energy funds, and these funds have many projects under development and construction. In 2020, KLP also partnered with DNB to invest a total of NOK 12 billion in wind farms. NOK 12 billion in wind farms, hydropower plants and solar energy. KLP is also closely monitoring the development of offshore wind and has already invested in several projects through global funds.
Another proud investment for KLP is our investment in renewable energy in developing countries. More development of renewable energy in these countries is crucial to achieving the climate goal and is one of the keys to success in sustainable development and growth. In total, KLP has invested more than NOK 930 million in renewable energy in various developing countries. Together with Norfund (the state investment fund for companies in developing countries), KLP has contributed to the construction of 975 MW of renewable energy, corresponding to the electricity needs of around 6.7 million inhabitants in developing countries. Among the renewable energy projects we have invested in are one of the world's largest solar parks in Egypt, Mozambique's first large-scale solar park and Africa's largest wind farm in Kenya.
KLP provides green loans, invests in FSC-certified forests and electric ferries
Renewable energy and green buildings make up the majority of KLP's climate-friendly investments, but KLP has also invested NOK 6.3 billion in other climate-friendly activities and new technology. NOK 6.3 billion in other climate-friendly activities and new technology that will contribute to the green shift. We are helping to electrify coastal boats and recognise the need for more renewable energy if we are to succeed in electrifying the whole of Norway. Among other things, KLP granted NOK 1.15 billion in new green loans last year. NOK 1.15 billion in new green loans for various projects related to transport, water, sewerage and property renovation and rehabilitation in Norwegian municipalities and county municipalities. These projects have a clear climate and environmental profile, and one of the loans went to Møre og Romsdal County Municipality for the purchase of electric ferries.
KLP has also invested in a forest fund that invests in FSC-certified forest properties in Sweden, Finland and the Baltics. These investments increased in 2020, and in total, KLP has invested almost 1.2 billion in sustainable forests.
Of course, there are many companies in the listed portfolio that also contribute to the green shift, but these are excluded from this definition of climate-friendly investments.