LD Pensions has a responsibility to ensure a high return. At the same time, we are committed to ensuring that our investments are made responsibly. Balancing these two objectives inevitably raises a number of dilemmas, which we address on an ongoing basis.
Here you can read about three examples of dilemmas that are very much in the spotlight at the moment.
Investment in countries where human rights are violated
Should we invest in countries where human rights are violated, but where capital can help to boost the economy and improve living conditions for the population? Investment can drive development, but it also risks legitimising and supporting regimes that oppress their citizens. Where should the line be drawn when it comes to human rights violations in a country, and how much can we accept? Is a country that has the death penalty worse than a country without freedom of expression? And is the country moving in the right or the wrong direction when it comes to upholding human rights?
It is difficult to keep track of developments in every country in the world and assess their efforts to uphold human rights. We therefore work with an external organisation that helps us monitor and analyse the situation globally and rank countries in terms of human rights.
Raw materials for the green transition and workers’ rights
The green transition requires resources such as lithium and cobalt, but these are often extracted under conditions that do not respect workers’ rights. Should we invest in these sectors to promote sustainable solutions, or withdraw to avoid complicity in human and labour rights violations? It is a balancing act that all investors must navigate. In LD Pensions, we work with an ESG agency that monitors and assesses the companies we invest in. The ESG agency also engages, on behalf of us and other investors, in dialogue with companies that breach laws and international standards. We exclude from our investment universe any companies that the ESG consultancy deems to be uncooperative.
Weapons and geopolitical uncertainty
Investments in the arms industry present a complex dilemma for investors. On the one hand, weapons may be necessary to ensure national and global security and to maintain peace through defence. On the other hand, there is a risk that weapons will be used in conflicts involving war crimes or human rights violations. As a responsible investor, one must weigh up whether to support the production of weapons within an ethical framework, or to avoid the sector altogether in order to minimise the risk of contributing to harmful causes. This choice requires a balanced approach that takes into account both security and ethical considerations.
In LD Pensions, we do not invest in companies that produce weapons prohibited by international conventions, such as anti-personnel landmines, cluster munitions, biological weapons and chemical weapons.  Nor do we invest in companies involved in the production of nuclear weapons or the modernisation of existing nuclear weapons, and which may therefore be linked to violations of the disarmament provisions of the ‘Non-Proliferation Treaty’ (Non-Proliferation Treaty) and violations against civilian populations under the Geneva Conventions. Furthermore, LD Pensions excludes from our investment universe companies that produce nuclear weapons or components that are either essential to the functioning of nuclear weapons or dedicated to nuclear weapons.
