The foundations’ green impact investments.

Since 2013, the foundations have invested an increasing portion of the assets in green impact investments, aiming to combat climate change on one hand and contribute attractive returns on the other. We believe it is possible to deliver on the dual bottom line.

A significant portion of the impact investments is allocated to plants for the production of green power from wind turbines and solar cells, as well as sustainably managed forests worldwide. We also invest in green growth companies and entrepreneurs at various development stages. The plants and companies are selected by specialists within the respective areas of activity.

Our goal for the period 2016-2019 was to have the contractual commitments for impact investments constitute 10% of the capital committed by the foundations – which has been realised. Towards 2023, we aim to further increase this type of investment to 15%.

Key investments in the USA

Investments are distributed worldwide with a focus on the USA, which, as the world’s economic superpower, has a dynamic, innovative business environment with companies in all growth phases – ranging from small startups to the world’s largest multinational corporations. The country is therefore central to any investment portfolio.

Historically, the USA has had privileged access to energy and resources, resulting in substantial resource consumption and reduced interest in green technologies. However, not all American citizens, politicians and business leaders share the relaxed approach to environmental issues, and the skyrocketing oil prices in the 2000s, along with better understanding the climate change threat, have gradually changed the landscape, creating many investment opportunities with attractive impact potentials. Market mechanisms and the globalised world economy ensure that technological advancements by American companies will be applied worldwide.

Focus on green technologies

The production of renewable energy from solar, wind, biomass and hydropower is our largest investment area. We have a total of 35 investments in this category, including 16 in wind, 15 in solar, two in hydropower and two in incineration plants. Electricity production based on coal, gas and oil emits significant amounts of CO₂, making it environmentally impactful to replace fossil power with green alternatives. In the coming years, we expect electricity consumption to increase, as more processes become electricity-based rather than oil, coal and gas-based.

The second-largest investment area is sustainably managed forests in North America, South America, Asia and Australia. Forests can convert significant amounts of CO₂ from the atmosphere into carbon, making them a crucial tool in the fight against climate change. Through photosynthesis, trees ’inhale’ CO₂, which is stored in the tree’s trunks, branches and roots.

A significant portion of the foundations’ impact investments is placed in green companies and entrepreneurs working in various sectors such as transportation, energy, industry and agriculture. These companies share the goal of developing, marketing and selling future green technologies. The objective is to achieve profitability and gain access to global markets, thereby maximising the positive impact on the climate through the sale of the company’s products and services.

Three examples of impact investments:

Saildrone

The company Saildrone is an example of a technology-focused investment in a company in the early growth phase. Saildrone is a San Francisco-based American company that designs, manufactures and operates autonomous measuring vessels powered by solar and wind energy. Despite the majority of the Earth’s surface being covered by oceans, we know surprisingly little about them, including how the oceans respond to the changing climate. One reason for this is the high cost and resource-intensive nature of conducting measurements in the world’s oceans, involving large research vessels and crews.

Saildrone reduces data collection costs, as its vessels are autonomous, remotely controlled via satellite and powered by renewable energy. The drones can measure sea temperatures, CO₂ levels and fish stocks. They can also contribute to improved weather forecasts that benefit the 65% of the world’s population living near coastlines.

These drones can stay at sea for many months and operate in the harshest environments. Recently, one of the drones completed the world’s first autonomous sailing trip around Antarctica, covering 196 days and 22,000 kilometres. The journey included challenges such as 15-metre-high waves, wind speeds exceeding 35 m/s and collisions with icebergs. The drones have also been used by Norwegian research institutions in the North Sea, close to Denmark.

Proterra

Proterra is a leading designer and manufacturer of electric buses, often referred to as the ’Tesla of buses.’ The company holds the world record for the longest distance travelled on a single charge by an electric vehicle, covering an impressive 1,772 kilometres. Electric buses do not emit CO₂, NOx or harmful particles when in operation, and they are significantly quieter than traditional diesel-based buses. Proterra estimates that replacing a diesel bus with an electric one reduces carbon emissions by just over 100 tons annually, equivalent to the annual carbon emissions of about nine Danes.
To promote its technology and increase the number of electric vehicles on the roads, Proterra collaborates with several established bus and truck manufacturers, as the technology can also be integrated into other heavy electric vehicles such as trucks and garbage trucks.

The partners design and manufacture the vehicle’s ‘shell,’ including the body and interior, while Proterra provides the advanced components such as motors, batteries and control technology. In this way, manufacturers are able to market and sell electric vehicles as their own, without spending resources on developing the advanced technology. This approach is known from laptops, where the chip component manufacturer Intel under the slogan ‘Intel Inside’ for many years supplied chips to other laptop manufacturers.

Forest investment in California

The foundations have invested in a sustainably managed forest in California covering approximately 7,000 hectares, equivalent to 9,750 football fields. Part of the forest is designated for CO₂ storage and may not be harvested for the next 100 years. This has generated CO₂ credits that have been sold on the Californian CO₂ market introduced in 2013. The system is comparable to the European CO₂ market, allowing companies to offset their emissions by purchasing CO₂ credits.

The coming years

Our impact investments are long-term, so it will take a few more years before we can demonstrate success on the dual bottom line. However, we have great confidence in this type of investment, and we hope others will be inspired by our work, leading to the inclusion of impact investments in their investment portfolios over time.