PFA

PFA describes its administration, management and supervisory bodies as the Board of Directors, the Executive Board and three board committees: Audit, Investment and Remuneration (p43). The Board of Directors has 15 members, comprising ten non-executive members elected by the Annual General Meeting and five employee-elected members, with a gender split of 33 per cent women and 67 per cent men (5 women, 10 men) and four independent members. The Executive Board has five executive members, 20 per cent women and 80 per cent men (reported as 1 of 4). The Audit Committee (four non-executive members, 25 per cent women), Investment Committee (four non-executive members, 25 per cent women) and Remuneration Committee (four non-executive members, 25 per cent women) are each drawn entirely from the Board. PFA lists the collective competencies required (including sustainability) and notes an annual self-evaluation of collective and individual competencies plus a fit and proper assessment by the Danish Financial Supervisory Authority. Fuller board details appear on pages 184 to 188.

PFA reports that throughout 2024 the Board of Directors was continuously informed by the Executive Board about sustainability work across the value chain, with particular focus on CSRD and the double materiality assessment, which the Board approved along with the prioritisation of CSRD implementation (p45). The Board was informed of the IROs on the standards assessed as material from an impact and/or financial perspective, and of a due diligence process for the company side based on the OECD Guidelines; the investment area continuously conducts sustainability due diligence and reports to the Board. Board-approved policies are reviewed at least annually; in 2024 the Board reviewed selected policies in two rounds (Q2 and Q4), making material changes to five policies to comply with CSRD (approved 8 November 2024, and the whistleblower policy on 11 December 2024). The Executive Board sits on the corporate responsibility steering group and was closely involved in the first DMA. The Audit, Remuneration and Investment committees were each informed of material IROs relevant to their remit.

PFA discloses that part of the Executive Board's variable remuneration is linked to sustainability, tied to goals supporting a more sustainable business, including compliance with legislation and board policies and guidelines that contain sustainability elements (p47). Depending on the individual executive's responsibilities, this can cover ESG in investment processes, products, consulting, digitalisation and data, and climate issues are integrated for relevant group directors. The purely variable part of Executive Board remuneration is capped at a maximum of 20 per cent of fixed salary, and for 2025 at a maximum of 10 per cent. PFA states it has chosen not to disclose the average percentage of variable remuneration linked to sustainability, and that remuneration is not linked to specific published sustainability goals or parameters. Achievement is assessed by the Chairmanship, on a recommendation from the Remuneration Committee. Remuneration of the Board of Directors and board committees is not linked to sustainability.

PFA provides its statement on due diligence in Table 3 (Section 1.15, p47), mapping the core elements of the due diligence process to the sections of the sustainability report where each is addressed. The table covers the standard due diligence elements: embedding due diligence in governance, strategy and business model (referencing GOV-2 in Section 1.12, GOV-3 in Section 1.14 and SBM-3 in Section 1.5); engaging with affected stakeholders at key steps (Sections 1.1, 1.4, 1.6, plus SBM-2 and IRO-1 references); identifying and assessing negative impacts (Sections 1.5 to 1.8 and topical standards); taking measures to mitigate negative impacts (referencing MDR-A and topical actions); and tracking the effectiveness of these efforts and communicating (referencing MDR-M and MDR-T). PFA notes it has prepared a due diligence process for the company side based on the OECD Guidelines for Multinational Enterprises, while the investment area conducts ongoing sustainability due diligence on investment assets.

PFA describes risk management and internal controls over sustainability reporting in Section 1.16 (p48). Sustainability risks are handled within PFA's existing risk management system on an equal footing with other risks, following the classic three lines of defence. For CSRD reporting, the operational risks relate primarily to ensuring adequate reporting on all material disclosure requirements and paragraphs. Mitigating actions include establishing a core project group that continuously monitored whether sufficient resources and competencies were available, quality assurance and use of the four eyes principle, and a central corporate responsibility and strategy function that collects and quality assures the content of the report. PFA states that once CSRD reporting transitions from a project phase to being operational, it will register the related risks through its existing annual risk registration process and system. The Board of Directors, Executive Board and committees have been continuously informed about PFA's project risks related to the reporting.

PFA describes itself as a Danish pension and life insurance company serving corporate, organisational and private customers, with approximately 1.3 million customers, making it Denmark's largest pension company, and 1,484 employees (headcount) in Denmark at end 2024 (p34). Customers' pension funds are managed through PFA Asset Management (PAM), with total assets under management of approximately DKK 690 billion. The business runs on the Focused Customer Community strategy launched in 2023 over a two-year period, built on four cornerstones: financial security, health, a good senior life and corporate responsibility, with the green transition identified as a further crucial area. PFA offers four groups of products and services: pension savings and investment products (including PFA Climate Plus and four new sustainability funds launched in 2024), insurance products, general service and advisory services, and non-financial services. The value chain is split into PFA as a company (suppliers, own domicile, partners and customers, mostly in Denmark) and its globally exposed investment portfolio, and PFA has committed to net-zero CO2e from the total investment portfolio by 2050.

PFA identifies its most important stakeholders as its customers, employees, Board of Directors and society as a whole (p38). It gathers customer perspectives through PFA's Customer Board, which consists of its largest corporate and organisational customers and acts as a guiding body, as well as through seminars and advisory situations. Employee views are collected via annual engagement surveys, and PFA describes developing a management system to eventually collect supplier perspectives. For the double materiality assessment, PFA conducted 17 structured interviews with key stakeholders representing its own employees, customers, citizens, politicians and investors. Key findings were that most stakeholders see corporate responsibility toward customers and the healthcare and advisory services as crucial, that all stakeholders identified climate as the most important environmental aspect followed by biodiversity, and a general expectation that PFA has its own house in order on corporate behaviour. These responses are reflected in the DMA results, and the Board of Directors, Executive Board and committees are continuously informed of stakeholder perspectives.

PFA presents its material impacts, risks and opportunities in Section 1.5 (p38), reporting results separately for the company and for investments in Table 2. For PFA as a company, the material standards are climate change (E1), own workforce (S1), workers in the value chain (S2), consumers and end-users (S4) and business conduct (G1). For its investments, all value-chain standards are material: E1, pollution (E2), water and marine resources (E3), biodiversity and ecosystems (E4), resource use and circular economy (E5), S2, affected communities (S3), S4 and G1, while own workforce (S1) is not applicable to investments. PFA's largest negative impacts sit downstream through its roughly DKK 690 billion portfolio, exposed across nearly all sectors, with climate change and biodiversity rated the most important environmental topics. On the company side, E1 is treated as material even though it did not meet the financial threshold, because it is a fundamental part of PFA's strategy. PFA assesses its strategy and business model as resilient to the identified IROs.

PFA describes its double materiality assessment process in Sections 1.6 and 1.7 (p41). The first DMA was prepared during 2023 and 2024 by a central working group with representatives from the company and investment sides, with results presented to internal audit, compliance, risk management, legal and the Executive Board. PFA followed ESRS 1 and 2 and used EFRAG's three guidance documents. An impact assessment across the whole value chain was done first, then a financial materiality assessment. For impacts, each topic, sub-topic and sub-subtopic was scored 0 to 5 on size, scope and irreparable nature; a total of 8 or more out of a possible 15 was deemed material, though items below 8 that are fundamental to PFA's strategy or existing work (such as company-level E1) are still treated as material. Positive impacts were scored on size and scope. For company financial materiality, existing registered operational risks were used, with economic or reputation scores at or above 9, or a regulatory score at or above 6, considered material, converted to a 12-month financial loss value. Investment financial materiality used a risk and probability scoring method over a 10-year timeframe against 2023 AUM. PFA also conducted interviews with internal and external stakeholders to qualify the results.

PFA provides an overview of the disclosure requirements covered in Table 5 (Section 1.18, pages 51 to 53), listing the page where each ESRS 2 and topical disclosure requirement is answered, which requirements use the phase-in option, and which data points originate from other EU legislation (SFDR, Pillar 3, the Benchmark Regulation, the Climate Act and the EU Taxonomy). PFA notes it is directly covered by SFDR and Pillar 3 but has no direct obligations under the Benchmark Regulation or the Climate Act. Reflecting its investor role, PFA finds essentially all topical standards material through the company and/or its investments, with the two dimensions reported separately. It has used phase-in options extensively, thoroughly reporting climate change (E1), biodiversity (E4) and business conduct (G1) for investments in the first year while phasing in others such as E2, E3, E5, S2, S3 and S4. Table 5 shows individual disclosure requirements marked as phased in (for example E1-9 elements, E2-6, E3-5, E4-6, E5-6 and S1-12) and several data points marked non-material.

PFA discloses a transition plan covering both its investment portfolio and its own operations, anchored in the Paris Agreement goal of limiting warming to 1.5 degrees C (p56 to 57). Because roughly 99 per cent of PFA's total CO2e emissions come from its investment portfolio (investment assets scope 1, 2 and 3, reported under PFA's scope 3), the plan focuses most heavily on financed emissions. Portfolio decarbonisation relies on three levers: investing in green assets, reducing the share of CO2e-intensive assets, and active ownership to drive company reductions. PFA excludes companies where oil-sands or thermal-coal extraction, or coal power, exceeds 5 per cent of revenue, or that are expanding coal, and excludes bonds from oil and gas companies. For its own operations (scope 1 and 2), decarbonisation comes from switching company cars to electric by 2025, buying green electricity certificates, and energy efficiency plus renewable energy such as solar panels. The plan and its targets were approved by PFA's Executive Board and Board of Directors and are integrated into the Corporate Responsibility Policy and the Responsible Investment and Active Ownership Policy.

PFA reports that its climate change mitigation and adaptation policies are anchored in the Corporate Responsibility Policy and the Responsible Investment and Active Ownership Policy, supported by related guidelines (p62 to 63). The Corporate Responsibility Policy sets the overall commitment to reduce PFA's CO2e emissions in line with the Paris Agreement and reflects the new 2024 scope 1 and 2 targets, plus energy efficiency and renewable energy expansion. The Responsible Investment and Active Ownership Policy identifies climate risk as PFA's most material sustainability risk and distinguishes risks before and after investment. Relevant guidelines cover integration of sustainability risks, active ownership, the work to achieve net-zero CO2e emissions, and company car regulation. The net-zero guidelines address prioritised CO2e reduction, negative emissions via carbon-storing investments, and the use of carbon credits. PFA states it does not use CO2e credits to offset investment-portfolio emissions, only for its own operations. The transition plan sits within the Responsible Investment and Active Ownership Policy, approved by the Board of PFA Holding on 8 November 2024, including PFA's enrolment in the Science Based Targets initiative; the guidelines were approved by the Executive Board on 25 October 2024.

PFA describes concrete 2024 actions under its three decarbonisation initiatives (p64 to 66). For its own operations, the company car fleet moved from 53 combustion and 40 electric cars to 23 combustion and 48 electric, cutting scope 1 emissions by 52 per cent; solar panels installed in 2023 covered 15 per cent of electricity consumption in 2024; and green electricity certificates were purchased. Together these cut scope 1 and 2 by 110.0 tonnes CO2e, a 27 per cent reduction. For investments, PFA had invested about DKK 90 billion toward the industry's conditional DKK 450 billion environmental commitment by 2030, expanded US sustainable forestry to four assets totalling roughly 28,000 hectares, and held about DKK 15.6 billion of EU-taxonomy-aligned property across 68 properties. On active ownership, PFA became a co-lead investor in the Climate Action 100+ dialogue with TotalEnergies (voting against its climate plan in May 2024), engaged BHP, Freeport McMoRan and Rio Tinto in mining, divested Shell, and voted at 402 general meetings covering about 95 per cent of the equity portfolio's CO2e footprint. On costs, PFA reports CapEx of about DKK 15.6 billion tied to EU-taxonomy-aligned real estate.

In 2024 PFA committed to setting short-term (2030) and long-term (2050) targets through the Science Based Targets initiative (SBTi) and expects SBTi validation of its scope 1, 2 and scope 3 targets during 2025; the targets are not yet third-party verified (p66 to 68). For its own operations, PFA set a market-based target to cut absolute scope 1 and 2 CO2e emissions by 70 per cent by 2030 from a 2023 base year, equal to a 288.7 tonne reduction, and has a standing target for scope 1 and 2 to be CO2e neutral each year using climate credits. For investments, PFA has a target of net-zero CO2e emissions across its total investment portfolio by 2050 at the latest, anchored in the UN-backed Net-Zero Asset Owner Alliance. Under the Alliance, PFA set a five-year interim target of a 29 per cent intensity-based CO2e reduction by end-2024 from a 2019 base for listed shares, corporate bonds and parts of real estate (investment assets scope 1 and 2); it achieved a 69 per cent reduction in that footprint. Real estate sub-targets and the 50-emitter climate-dialogue ambition (11 reached in 2024) are also disclosed. PFA Climate Plus aims to be CO2e neutral by 2025 and negative by 2030.

PFA reports energy consumption and mix for its own operations (p68 to 69). Total energy consumption rose by 123 MWh, from 3,027 MWh in 2023 to 3,150 MWh in 2024. Fossil-fuel-sourced energy fell slightly from 266 MWh to 261 MWh (from 8.8 per cent to 8.3 per cent of the total), nuclear energy was 190 MWh rising to 196 MWh (6.3 per cent to 6.2 per cent), and renewable energy rose from 2,571 MWh to 2,693 MWh (84.9 per cent to 85.5 per cent). Within renewables, purchased renewable energy was 2,433 MWh in 2024 (up from 2,399 MWh) and self-produced renewable energy rose to 260 MWh from 172 MWh, reflecting a full-year effect of the solar panels installed in 2023. Fuel consumption from renewable sources was zero in both years. Renewable sources make up the vast majority of PFA's energy consumption. These figures relate to PFA's own operations, not the investment portfolio.

PFA reports gross GHG emissions following the GHG Protocol (p69 to 70, Table 12). For its own operations, scope 1 was 149.3 tCO2e in 2024 (down 52 per cent from 313.9). Location-based scope 2 was 140.2 tCO2e and market-based scope 2 was 153.0 tCO2e. Combined market-based scope 1 and 2 was 302.4 tCO2e, down 27 per cent from 412.4 in 2023. Material scope 3 categories other than investments include purchased goods and services (48,586 tCO2e), fuel and energy activities (148.8), waste (0.7), business travel (620.9) and employee commuting (616.9); these non-investment scope 3 categories are less than 1 per cent of total scope 3. The dominant figure is scope 3 category 15 investments (financed emissions): 13,309,508 tCO2e in 2024 versus 13,292,092 in 2023, roughly flat despite about 10 per cent higher AUM. Total GHG emissions were about 13.36 million tCO2e (market-based 13,359,784). Government bond emissions of 2,315,810 tonnes (2024) are reported separately due to double counting, as are biogenic emissions.

PFA reports both GHG removals and the use of carbon credits (p68). For its own operations, PFA does not treat climate credits as a substitute for real reductions but buys them to cover residual scope 1 and 2 emissions after green electricity certificates. In 2024 it purchased CO2e credits equal to 454 tonnes CO2e, covering 150 per cent of scope 1 and 2 emissions, via South Pole from wind-turbine projects under the Voluntary Carbon Standard issuing Verified Carbon Units. It intends to continue this in 2025. Carbon credits are not used to offset investment-portfolio emissions. Separately, PFA reports GHG removals through investments in sustainable forestry to support the PFA Climate Plus net-zero-by-2025 ambition: negative (biogenic) CO2e emissions absorbed and stored in wood amounted to approximately -200,345 tonnes in 2024, based on a conservative estimate with data from Forest Investment Associates, and this figure is undergoing independent third-party verification expected in the first half of 2025. Forest investments do not replace PFA's other reduction efforts.

PFA discloses anticipated financial effects of physical and transition risks mainly through climate scenario analyses of its investment portfolio (p59 to 62). Using MSCI's Climate Value-at-Risk model for listed shares (about 37 per cent of investments) and corporate bonds (about 8 per cent), PFA reports potential present-value devaluations under three scenarios. In the 1.5 degrees C disorderly transition scenario (A), the equity portfolio faces an aggregate Climate VaR of -8.4 per cent, or DKK 20,361 million, versus -12.1 per cent for the MSCI ACWI benchmark; corporate bonds -5.5 per cent (DKK 3,030 million). In the orderly 1.5 degrees C scenario (B), shares -7.3 per cent and bonds -4.1 per cent. In the 3 degrees C hot-house scenario (C), physical risk dominates, with shares -5.8 per cent and bonds -0.9 per cent. For real estate (about 9 per cent of investments), S&P Global's Climanomics model estimates 2090 to 2100 devaluations of -0.3 per cent (DKK 270 million) under Low, -0.6 per cent (DKK 533 million) under Medium and -2.4 per cent (DKK 2.1 billion) under High. PFA found no climate-related liabilities requiring recognition in its accounts and assesses physical risks to its own operations as limited.

PFA states that its Policy for responsible investment and active ownership provides the framework for integrating sustainability into investment management and counteracting negative environmental impacts, including pollution of air, water and soil by investee companies (page 77). Integration is based on screenings across asset classes before and after the point of investment, assessed against international norms and standards, including the UN Global Compact and the OECD Guidelines for Multinational Enterprises, in which the policy is anchored. In addition, PFA conducts active ownership dialogues using a risk-based approach to sustainability risks and in response to any significant controversies related to pollution. These are elaborated in PFA's Guidelines for sustainability risks and Guidelines for active ownership. The disclosure reflects PFA's position as an institutional investor addressing pollution indirectly through its portfolio rather than through its own operations.

PFA reports on a best effort basis for pollution in 2024, citing the current level of data maturity on indirect pollution impacts from its investments and its assessment of significant IROs (page 77). It states that it has primarily reported on the disclosure requirements relating to its policies. Beyond referencing its EU SFDR PAI statement on significant negative impacts where relevant, PFA has not reported any further specific actions, metrics or targets related to pollution. Instead it refers readers to its log of active ownership dialogues at pfa.dk/dialoger, which also includes initiatives from before the reporting year. PFA notes some positive influence through active ownership, seeking to promote integration of environmental risks including pollution by investee companies via screening, dialogue and voting. It recognises the importance of the area and says it is continuously working to improve data quality and develop processes to expand reporting under CSRD.

PFA has not set specific targets related to pollution (page 77). Under its combined disclosure on measures and targets, PFA explains that, given the current level of data maturity on indirect pollution impacts from its investments and its IRO assessment, it followed a best effort approach in 2024 and primarily reported on policy-related disclosure requirements. It states plainly that it has not reported any further specific actions, metrics and targets related to pollution, referring instead to its log of active ownership dialogues at pfa.dk/dialoger. PFA also notes it has used the phasing-in option for the specific disclosure requirements, to be reassessed throughout 2025 and 2026 taking into account the specific disclosure requirements, data maturity and further guidance on the CSRD reporting level considered adequate for financial institutions.

On emissions to air, water and soil by pollutant, PFA states it does not have the data availability to specify emissions per pollutant (pages 76 to 77). Instead it screens, monitors and reports on data points for significant negative sustainability impacts of its investments, both upstream and downstream. This includes the PAI indicator 8 (Discharge to water in the PAI statement), for which further information is available at pfa.dk/baeredygtighedsindvrkinger. PFA notes that this indicator does not cover emissions to air or soil. Contextually, PFA describes that it indirectly affects pollution through investments in companies that may risk polluting through their activities, such as the chemical industry or mining, but that exposure to industries and companies associated with air, water and soil pollution is limited and not financially significant compared with its total portfolio. Because of this, PFA has not conducted consultations with affected communities in relation to pollution.

PFA does not provide quantitative figures on substances of concern or substances of very high concern (page 77). Consistent with its best effort, policy-focused approach for pollution, PFA states it does not have the data availability to specify emissions per pollutant and instead screens, monitors and reports on data points for significant negative sustainability impacts of its investments upstream and downstream, including the PAI indicator 8 (Discharge to water in the PAI statement) at pfa.dk/baeredygtighedsindvrkinger. It notes this indicator does not cover emissions to air or soil. PFA also confirms it has used the phasing-in option for the specific disclosure requirements, to be reassessed throughout 2025 and 2026 in light of the specific disclosure requirements, data maturity and further guidance on the adequate CSRD reporting level for financial institutions. No specific disclosure on substances of concern is otherwise presented.

PFA states that its Policy for responsible investment and active ownership forms the framework for integrating sustainability into investment management and counteracting negative impacts, including on water and marine resources, of investee companies (page 79). Integration is based on screenings across asset classes before and after the point of investment, assessed against international norms and standards, including the UN Global Compact and the OECD Guidelines for Multinational Enterprises, in which the policy is anchored. In addition, PFA conducts active ownership dialogues using a risk-based approach to sustainability risks, and in response to any significant controversies related to negative impacts on water and marine resources. These are elaborated in PFA's Guidelines for sustainability risks and Guidelines for active ownership. As an institutional investor, PFA addresses water and marine resources indirectly through its investment portfolio rather than its own operations.

PFA reports on a best effort basis for water and marine resources in 2024, reflecting the data maturity around indirect impacts from the investment part of its value chain and its assessment of IROs (page 79). It states it has primarily reported on the disclosure requirements that relate to its policies. Beyond that, PFA has not reported any further specific actions or metrics and targets under E3, but refers to its log of asset ownership dialogues at pfa.dk/dialoger, which also includes initiatives from before the reporting year. PFA also notes that it offers customers the opportunity to invest in an externally managed fund targeting sustainable water supply through its You Invest platform, an Article 9 product under the EU Disclosure Regulation, with more information at pfa.dk/du-investerer. It recognises the importance of the area and says it is continuously working to improve data quality and develop processes for robust reporting under CSRD going forward.

PFA has not set specific targets related to water and marine resources (page 79). Under its combined disclosure on measures and objectives, PFA explains that, given the data maturity on indirect impacts on water and marine resources from the investment part of its value chain and its IRO assessment, it reported on a best effort approach in 2024 and primarily on policy-related disclosure requirements. It states plainly that it has not reported on any further specific actions or metrics and targets under E3 Water and marine resources, referring instead to its log of asset ownership dialogues at pfa.dk/dialoger. PFA also confirms it has used the phasing-in option for the specific disclosure requirements, to be reassessed throughout 2025 and 2026 taking into account the specific disclosure requirements, data maturity and further guidance on the CSRD reporting level considered adequate for financial institutions.

PFA does not report its own water consumption figures (page 79). Consistent with its investor role, it explains that it indirectly impacts water and marine resources through investments in companies whose business activities affect these resources, for example the food sector or companies operating in areas where water resources are scarce. PFA analysed the risk of its share and corporate bond portfolio using the MSCI Environmental Score, indicating limited risk (moderate to low level), and notes its equity portfolio carries lower risk than a global benchmark (MSCI ACWI). Overall it assesses the risk associated with water and marine resources as limited and not financially significant, and has therefore not consulted affected communities. In the DMA, 0.2 per cent of turnover associated with its equity portfolio was estimated to be linked to sustainable water practices, so PFA has not identified significant opportunities at this time. Under E3's best effort approach, no specific water consumption metric is provided.

On page 80, PFA describes how biodiversity is considered in its strategy and business model as an institutional investor. It has not identified significant negative impacts regarding land degradation, endangered species, desertification or land consolidation. Its approach is set out in the 2024 position paper 'PFA as an investor: A responsible approach to biodiversity', applying a principle of proportionality that prioritises the most significant sectors and companies by their dependence and impact on nature and by portfolio size. PFA acts through four areas: incorporating nature-related data into investment processes as data improves; working with nature and circularity in direct unlisted investments; exercising active ownership on high-impact sectors; and setting high expectations for the most nature-dependent companies. It notes that measuring biodiversity is location-specific and that suitable data is still scarce, so it relies on investee reporting. Drawing on Nature Action 100, prioritised sectors, and unlisted physical assets such as properties, forests and infrastructure, PFA considers its strategic approach overall resilient for the investment portfolio.

On page 81, PFA lists the policies and guidelines addressing biodiversity and ecosystems: the Policy for responsible investments and active ownership, Guidelines for integration of sustainability risks, Guidelines for active ownership, and Guidelines for working to achieve net zero CO2e emissions. Its overall approach is also described in the position paper 'PFA as an investor: A responsible approach to biodiversity'. PFA treats sustainability risks in line with other investment risks and integrates biodiversity considerations into investment processes on an equal footing with other sustainability risks. Screening for biodiversity and ecosystem risks is more detailed for listed than unlisted assets and covers land and agricultural practices, sustainable ocean and sea practices, and combating deforestation, based on international standards. In 2024 PFA invested in about 28,000 hectares of US forest, certified under PEFC or FSC standards covering biodiversity and human rights, with preferred geographical exposure to the southern USA; roughly 20 per cent of the area is reserved for natural forest.

On page 82, PFA describes actions across four areas from its biodiversity position paper. It incorporates nature-related data points into investment processes through greenhouse gas reduction, investing in green solutions under the EU taxonomy 'do no significant harm' requirement, and quarterly screening of shares and corporate bonds for environmental controversies using PAI metrics and UN Global Compact principles, aligned with TNFD recommendations. In direct unlisted investments it works with an external advisor to add biodiversity-promoting initiatives in and around 10 selected Danish properties across 2024 and 2025, developing management plans for seven properties in 2024 with three to follow, and mapping using the 'National Method for Mapping Urban Nature'. It invested in the TRÆ wooden office building and partnered with the City of Copenhagen. Through Nature Action 100 it engaged Nestlé, AstraZeneca and McDonald's, joined a Biodiversity and Natural Capital programme covering over 50 agricultural companies, and integrates biodiversity into mining, energy and infrastructure dialogues. It signed the 'Moving on Nature Together' declaration and supports the Kunming-Montréal '30 by 30' target.

On page 84, PFA reports targets related to biodiversity and ecosystems. As an investor, it set a goal to engage in active ownership dialogues on biodiversity and ecosystems with 50 companies over the period 2023 to 2025, covering direct dialogues, collaboration under Nature Action 100, and dialogues via its external partner Sustainalytics. By the end of 2024 it had participated in nature-related dialogues with 59 companies, exceeding the target. PFA also aims to integrate biodiversity-promoting initiatives on and around 10 selected properties in 2024 and 2025; in 2024 it developed new management plans for seven properties. The measures at these properties follow the prevention hierarchy's goals of avoidance and minimisation, planning activities to avoid negative impacts on nature and to minimise care measures that cannot be avoided. For both goals, ecological thresholds were prepared in 2024 using the Nature Action 100 benchmark plus baselines on the properties with management plans.

On page 84, PFA addresses impact metrics related to biodiversity change and is candid about data limitations. Because of challenges with local impact data, PFA does not have a data basis to specify negative impacts per area in relation to biodiversity for the value chain across its investment portfolio. Instead it screens, monitors and reports on data points for the significant negative sustainability impacts of its investments, both upstream and downstream. This includes PAI indicator 7, exposure to companies with activities that negatively impact biodiversity-sensitive areas and which fall under PFA's PAI statement, which gives an indication of the negative impact of its investments on nature. Readers are referred to PFA's separate PAI statement for the figures. PFA expects data quality and scope to improve as investee companies report under the CSRD and the Taxonomy Regulation. It states that no significant negative impacts have been identified regarding changes in land use.

On page 85, PFA reports its policies related to resource use and circular economy. The Policy for responsible investments and active ownership provides the framework for integrating sustainability into management and counteracting negative impacts, including on resource use and circular economy, in investee companies. Integration is based on screenings across asset classes both before and after investment, against internal norms and standards including the UN Global Compact and the OECD Guidelines for Multinational Enterprises, in which the policy is anchored. PFA also conducts active ownership dialogues using a risk-based approach to sustainability risks and follows up on significant controversies linked to negative impacts on resource use and circular economy, which are elaborated in its Guidelines for sustainability risks and Guidelines for active ownership. PFA states plainly that these policies do not explicitly address the waste hierarchy or the prioritisation of prevention over waste management.

On page 85, PFA reports its actions on resource use and circular economy, taking a 'best effort' approach given current data maturity on indirect impacts. It has primarily reported on disclosure requirements relating to its policies and points to its EU SFDR PAI statement on significant negative impacts for 2024 where relevant. PFA states plainly that, beyond this, it has not reported any further specific actions under the area, referring instead to its log of active ownership dialogues at pfa.dk/dialoger, which includes efforts from before the reporting year, and to the actions described under E4 biodiversity, which it treats as a related area. Related actions include promoting integration of environmental risks in investees through screening, dialogue and voting, dialogues with mining companies BHP and Freeport McMoRan on certification of operations, and offering customers an Article 9 circular-economy fund via the 'You Invest' platform. PFA says it recognises the importance of the area and is working to improve data quality and expand CSRD-compliant reporting.

On page 85, PFA effectively reports that it has no specific quantified targets for resource use and circular economy. Under its 'best effort' approach, given current data maturity on indirect impacts and its assessed impacts, risks and opportunities, PFA states that it has not reported any further specific metrics and targets under the area. Instead it refers readers to its EU SFDR PAI statement on significant negative impacts, to its log of active ownership dialogues at pfa.dk/dialoger, and to the actions and targets described under the related E4 biodiversity area. PFA also notes it has used the phasing-in option for the specific disclosure requirements on the expected financial effects of resource-use impacts, risks and opportunities, and that this will be reassessed in 2025 taking into account data maturity and further guidance on adequate CSRD reporting levels for financial institutions. It says it is continuously working to improve data quality and develop its processes.

On page 85, PFA addresses resource inflows in the context of its role as an institutional investor rather than a direct manufacturer. PFA indirectly influences resource use and the circular economy through its investments in companies that both influence and depend on the sustainable use of resources, which can create negative impacts when companies do not use resources efficiently, deplete resources, or fail to recycle waste from their activities. Under its 'best effort' approach, PFA does not disclose quantified resource inflow figures for its own operations or value chain. It states that it does not have the data to specify the degree of recycling and adoption of circular principles in the value chain relating to investments. Instead PFA relies on screening, monitoring and reporting of data points for the significant negative sustainability impacts of its investments, both upstream and downstream, and refers readers to its SFDR PAI statement for the underlying figures.

On pages 85 to 86, PFA addresses resource outflows in the context of its investment activity. As an investor, it does not report quantified resource outflow figures for its own operations. It states that it does not have the data to specify the degree of recycling and the adoption of circular principles in the value chain relating to investments. Instead PFA screens, monitors and reports on data points for the significant negative sustainability impacts of its investments, both upstream and downstream, and refers readers to its EU SFDR PAI statement for the relevant figures. It notes that investee companies that do not use resources sustainably will be exposed to transition risks from potentially stricter regulation, for example in waste management and recycling of materials, but assesses the overall risk in the area as limited and not financially significant under CSRD. Because of this, PFA has not conducted consultations with affected communities in relation to this area.

PFA does not disclose quantified waste tonnages of its own; as an institutional investor it reports waste through its portfolio via the SFDR PAI framework rather than as absolute figures. On page 85, for resource outflows, PFA states it does not have the data to specify the degree of recycling and adoption of circular principles in the value chain relating to investments, and refers readers to its EU SFDR PAI statement, which covers non-recycled waste indicators. On page 86, under the heading 'Hazardous and radioactive waste', PFA again states it lacks the data to specify recycling and circular principles in the investment value chain, but confirms it screens, monitors and reports on PAI indicator 9, the proportion of hazardous waste and radioactive waste, in its PAI statement, to which the interested reader is referred. No specific tonnages for non-recycled or hazardous and radioactive waste are given in the sustainability statement itself; the figures reside in the separate PAI statement at pfa.dk/baeredygtighedsindvrkinger.

PFA describes its human rights policies for own workforce (p101). It follows the UN Guiding Principles on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, and the OECD Guidelines for Multinational Enterprises. PFA assesses that the rights on which it could have the greatest negative impact are employment conditions, equal treatment and non-discrimination, and the right to privacy and data protection. Equal treatment is ensured through personnel policies for a harassment-free working environment and for diversity. The diversity policy states no employee should experience discrimination based on gender and gender identity, disability, age, sexual orientation, religion, political beliefs, skin colour, race and ethnicity, nationality or upbringing. PFA also has a Policy for corporate responsibility that opposes forced labour, human trafficking and child labour, and a Policy for late-life careers. PFA notes its Code of Conduct for non-salaried employees does not currently include a clause on precarious employment. Employee data is protected under applicable data protection law.

PFA describes processes for dialogue and involvement of employees and their representatives (p102 to p103). Contact is handled directly or through employee representatives depending on the topic. The Cooperation Committee, made up of management and employee representatives, discusses workplace development, results and strategy, organisational changes, employee policies, mental health and safety, and technological developments, and meets four times a year. PFA's Managing Director chairs it, and HR implements its decisions. The occupational health and safety organisation has employee-elected representatives, addresses the physical working environment and meets at least three times a year. The head of HR Legal chairs it. The annual engagement survey, in which 93 per cent of employees participated in 2024, provides insight into employee assessment of PFA as a workplace and is run by the Director of HR. PFA also accommodates disabled employees, including flexi-job plans, and since 2022 has included engagement-survey questions on employees' peace of mind.

PFA describes channels to raise concerns and processes to remediate negative impacts (p104). Employees can report issues such as bullying, pay dissatisfaction or working-relationship challenges through the management system or HR, and can contact an HR representative, employee representative or occupational health and safety representative. In the complaint process, the case is first uncovered by interviewing involved and relevant parties, followed by a report and a note. If grounds exist, an action plan is drawn up with the HR partner and possibly external partners, with ongoing follow-ups. Effectiveness is monitored via the engagement survey, WPA investigation and feedback from union and employee representatives. PFA also has a whistleblower scheme allowing anonymous disclosure of suspected irregularities, available via intranet and website; employees complete mandatory training on it every two years. External consultants and non-salaried employees receive the whistleblower and complaints introduction during onboarding. PFA follows applicable rules for compensation and remediation in the event of violations of human and labour rights.

PFA describes actions to manage material impacts, risks and opportunities (p105 to p106). To mitigate negative impacts on working conditions it has a personnel policy for preventing and managing sickness absence. For equal treatment it runs annual equal-pay assessments and salary statistics, uses gender-neutral recruitment language, and in 2024 appointed its first diversity and inclusion partner and marked a diversity week during Copenhagen Pride. On privacy, specially selected employees handle confidential colleague inquiries on health, pensions and insurance. Positive-impact initiatives include a scheme allowing all employees an 80 per cent workweek for 80 per cent pay, up to two work-from-home days a week with ergonomic home equipment, and equal parental leave. Under its health strategy (last revised 2023) PFA offers comprehensive health insurance, PFA Preventive Care, accident and dental insurance, and PFA EarlyCare early intervention. In 2024 PFA launched leadership training on difficult conversations with the Danish Chamber of Commerce and introduced three leadership principles: clarity, collaboration and execution. The 2024 sustainable-working-life score was 5.8 on a 1 to 7 scale.

PFA describes targets for managing impacts (p106). As part of its board-approved strategy, PFA aims to achieve an employee engagement score of 6.1 on a scale of 1 to 7 by 2026, measured via an engagement index averaging pre-selected questions from the annual survey. In 2024, 93 per cent of employees participated, and the score reached 6.1, above the 2024 goal of 6.0 and the industry average of 5.7. The average score across all engagement-survey questions in 2024 was 6.0. PFA also has targets and a board-approved policy to increase the proportion of the underrepresented gender at the company's other management levels, with the Board of Directors following up annually on effectiveness (see page 27). PFA measures anti-discrimination on pay through annual salary statistics submitted to the cooperation committee, and its remuneration committee annually assesses whether the remuneration policy is gender neutral. PFA notes its own-workforce goals do not meet CSRD minimum requirements for metrics or targets and that associated resource consumption is not disclosed. Employee turnover in 2024 was 13.0 per cent (231 resignations).

PFA discloses employee characteristics (p103). At the end of 2024 PFA had 1,484 employees (headcount), covering all full-time, part-time, hourly and temporary employees. Gender split by headcount was 749 men and 735 women, with 0 recorded as other or not reported, showing a very even distribution. On an FTE-average basis for 2024, total employees were 1,443 (706 women, 737 men). Of these, 1,304 were full-time (600 women, 704 men) and 139 were part-time (106 women, 33 men). There was 1 temporary employee (FTE average) and 0 employees on zero-hour contracts. The total FTE figure corresponds to note 6 in PFA's financial statements. PFA only has employees in Denmark. Gender is defined using the civil registration number rather than self-identification. Employee turnover for 2024 was 13.0 per cent, based on 231 resignations among permanent and part-time employees, excluding hourly employees.

PFA discloses characteristics of non-employees in its own workforce (p107). As of 31 December 2024, PFA had 377 registered non-employed workers, including external consultants (headcount). These non-salaried workers include employees from a major facility-management supplier who handle canteen operations, cleaning, reception and much of facility management, and employees from a major IT and software support supplier who provide internal IT support. PFA also hires consultants for tasks including strategy, IT and IT development, and facilitation of seminars and courses. The vast majority of non-salaried workers are in Denmark, though PFA has some consultants in Poland. Suppliers and external consultants must comply with PFA's Code of Conduct and the traffic rules for external consultants at all times, covering human and labour rights, the OECD Guidelines for Responsible Business Conduct and the UN Principles for Human Rights and Business. All non-salaried workers are registered in the ERP system in an external employee group, from which an extract is made at period end.

PFA discloses collective bargaining coverage and social dialogue (p107). All employees receive a salary meeting the rules on minimum wages in the Danish labour market. A large proportion of employees, 87 per cent, are covered by collective bargaining agreements, which set fixed minimum salaries depending on job function and responsibility. Employees not covered by a collective agreement are primarily managers and individually employed specialists who negotiate their own salary conditions, and who remain subject to Danish labour-market rules on remuneration and compensation. Table 19 places PFA's collective bargaining coverage in Denmark in the 80 to 100 per cent band and workplace representation (EEA) in Denmark also in the 80 to 100 per cent band. PFA does not register whether employees are members of a trade union, as this would require consent. Social dialogue occurs through the Cooperation Committee and the occupational health and safety organisation, both of which include employee representatives.

PFA discloses diversity metrics (p103). By age, of 1,484 employees, 199 (13 per cent) were under 30, 722 (49 per cent) aged 30 to 50, and 563 (38 per cent) aged 50 and over. PFA notes its workforce mostly consists of experts with higher education, so the proportion under 30 is naturally lower. For gender distribution in senior management (Table 18, as at 31 December 2024, calculated per CSRD requirements), the Executive Board had 4 men (80 per cent) and 1 woman (20 per cent). Other senior employees, defined as those with personnel responsibility reporting directly to the Executive Board, comprised 15 men (58 per cent) and 11 women (42 per cent). In total senior management there were 19 men (61 per cent) and 12 women (39 per cent). PFA notes this CSRD-based calculation differs from the target-figure calculation for the underrepresented gender on page 27.

PFA discloses information on adequate wages (p107). All employees at PFA receive a salary that meets the rules on minimum wages in the Danish labour market. A large proportion, 87 per cent, of employees are covered by collective bargaining agreements, which set agreed fixed minimum salaries depending on job function and responsibility. Employees not covered by a collective agreement, primarily managers and individually employed specialists, negotiate their own salary conditions with PFA and remain subject to Danish labour-market rules for remuneration and compensation. PFA operates only in Denmark. The disclosure indicates all employees are paid at or above an adequate wage benchmark based on Danish minimum-wage rules.

PFA discloses social protection (p108). Employees covered by the Danish Act on Salaried Employees who cannot work due to illness are entitled to salary, and all employees are additionally covered by public social-protection programmes against loss of income due to illness where conditions are met. Employees are covered by collective full-time health and accident insurance, dental insurance and other group insurance such as health insurance. Upon dismissal, employees are covered by Danish social security through several plans and laws providing financial support and job-search help. Employees are protected against loss of income due to industrial injury and acquired disablement through both public programmes and PFA's insurance plans, including statutory employees' compensation insurance covering work-related injuries. People in Denmark are entitled to a state pension (Folkepension). All PFA employees except student assistants are covered by a pension plan that is 100 per cent employer-paid; student assistants may pay into a voluntary pension, which is not an independent right under the current collective agreement.

PFA discloses training and skills development metrics (p108). All employees hold a performance and development interview with their immediate supervisor at least once a year. In 2024, 100 per cent of employees completed a performance review, split 100 per cent for men and 100 per cent for women (Table 20). On training hours (Table 21), the average per employee in 2024 was 18.6 hours in total, comprising 20.9 hours for men and 16.2 hours for women. PFA notes the higher figure for men reflects that areas sending employees to the Danish Insurance Academy, such as Private Customers and Corporate Customers, are predominantly male; adjusting for gender distribution within areas, women log slightly more hours than men. The reported training hours are limited to centrally registered hours, namely courses, certifications and training modules on pension and insurance at the Danish Insurance Academy plus mandatory e-learning on compliance and security. Most training hours are not centrally registered.

PFA discloses health and safety metrics (p109). All PFA employees are covered by the occupational health and safety management system and bound by its standards and guidelines, giving full coverage. In 2024, 8 occupational injuries were reported to the Danish Labour Market Insurance for assessment, corresponding to a reported occupational injury for 0.5 per cent of PFA's employees. No decision had yet been made in any of the 8 reported cases. There were no cases of occupational diseases in 2024. There were 2 days lost due to work-related injuries or accidents, and no days lost due to occupational diseases. No deaths due to work-related injuries or work-related diseases were recorded. Occupational injuries are calculated as reported cases during the period relative to the number of employees at period end; a report does not mean the injury is approved as an occupational injury. Days lost are based on the expected number of days of incapacity calculated at the time of reporting.

PFA discloses work-life balance and family-leave metrics (p108). All PFA employees are entitled to family-related leave of absence. From 1 July 2024, PFA introduced that all parents, regardless of gender and family structure, can take up to 25 weeks of maternity leave with full pay, in addition to normal maternity-leave rules. During 2024, 6 per cent of women and 7 per cent of men took family-related leaves of absence for a shorter or longer period. The family-related leave figure is calculated from ERP records as the total of caretaker leave, parental leave, paternity leave and childcare leave relative to the average number of employees by gender during the period. PFA also supports work-life balance through its 80 per cent workweek for 80 per cent pay scheme and up to two work-from-home days a week by agreement.

PFA discloses remuneration metrics (p109). The average pay gap between men and women at PFA was 17 per cent in 2024. PFA explains the primary reason is that men are overrepresented in the highest-paying areas such as PFA Asset Management, Finance & Actuarial, IT and Corporate Customers, while women are overrepresented in the least-paid areas such as Health, Customer Service and Communication, Corporate Responsibility and Marketing. The total annual remuneration ratio of the highest paid person compared to the median of total annual remuneration for all employees (the CEO pay ratio) was 12.07 at PFA in 2024. The gender pay gap is calculated as the difference in average salary levels between female and male employees, expressed as a percentage of the average salary level for male employees. Both figures are based on records in PFA's ERP system.

PFA discloses incidents, complaints and severe human rights impacts (p109). No cases of discriminatory behaviour were reported or registered through the Equal Treatment Board at PFA in 2024. There were no cases of human rights violations in 2024, whether through the OECD's contact points, the whistleblower scheme or internal channels. No complaints regarding discriminatory treatment were received in 2024 through PFA's internal channels. Because there were no cases through internal or external channels, PFA paid no fines. The number of discrimination cases is calculated as the total number of cases reported both to PFA's whistleblower scheme, which is available to employees, customers, external partners and suppliers, and to the Equal Treatment Board.

PFA discloses that its Policy for responsible investments and active ownership is the framework for integrating sustainability into investment processes and counteracting negative impacts on workers in the value chain of investee companies (report page 112). Expectations are anchored in the UN Guiding Principles on Business and Human Rights, the UN Global Compact, the ILO Declaration on Fundamental Principles and Rights at Work, and the OECD Guidelines for Multinational Enterprises. Integration is based on screenings before and after investment, plus risk-based active ownership dialogue set out in the Guidelines for the integration of sustainability risks and Guidelines for active ownership, the latter updated in 2024 to cover good management practices including labour rights. For suppliers, PFA's Code of Conduct applies and requires subcontractors to comply. PFA screens and reports on PAI indicators 9, 10 and 11 and refers readers to its PAI statement. PFA states it has not reported further specific processes or targets for value chain workers linked to investments and refers to its active ownership dialogue log at pfa.dk/dialoger.

PFA discloses that in 2024 it used proxies to understand which human and labour rights are at greatest risk of violation based on the industries in its supply chain (report page 112). On this basis it prepared self-evaluation forms to gain more supplier-specific knowledge about how suppliers respect human and labour rights within their own operations and their supply chains. PFA states clearly that it did not collect input directly from workers in its supply chain in 2024. Going forward, PFA plans to conduct dialogue with selected high and medium-risk suppliers to engage with workers in the value chain. Responsibility for daily compliance with the supplier management process and for keeping workflows and the management system updated sits in the CFO area under the Director of Finance and Contract Management. For investments, PFA relies on risk-based active ownership dialogue rather than direct worker engagement.

PFA discloses a whistleblower scheme and whistleblower policy, both available at whistleblowersoftware.com/secure/pfa, and encourages employees and external partners to report improper business conduct (report page 113). PFA assesses there is confidence in the scheme, and notes there have been no cases related to workers in the supply chain. Through its Code of Conduct, PFA encourages suppliers to have anonymous complaint mechanisms and to inform PFA of any negative impacts on workers. If PFA becomes aware it has contributed to or is directly linked to violations of human or labour rights in the supply chain, this is reported to the Director of Finance and Contract Management, who decides on remediation based on the OECD Guidelines for Multinational Enterprises, with all incidents registered in PFA's risk management system. PFA states it has not yet identified any such incidents, so the effectiveness of its remedial measures is not yet known, and it will evaluate this continuously if incidents occur.

PFA discloses that in 2024 it prepared a new business procedure for responsible supplier management based on the OECD Guidelines, the UN Global Compact principles and the UN Guiding Principles on Business and Human Rights (report page 113). The procedure applies a risk-based approach, dividing suppliers into high, medium and low sustainability risk plus those outside scope. All in-scope suppliers must sign PFA's Code of Conduct. High and medium-risk suppliers receive category-specific self-assessment questionnaires (SAQs); high-risk suppliers complete one annually and medium-risk suppliers every other year. PFA evaluates SAQs, gives feedback, and where improvement is needed enters dialogue and may issue a corrective action plan with recommendations such as training, process changes or added documentation, plus follow-up through meetings, further self-assessments or external audits. Relevant employees were trained in the new approach at the end of 2024, with integration continuing in 2025. PFA states it has not yet launched initiatives to create positive impacts for supply chain workers.

PFA discloses that it has not set any time-bound targets for workers in the value chain (report page 114). In 2024 PFA focused on building a robust process to mitigate negative impacts and states it has not currently set up KPIs or targets for work on positive or negative impacts, and had not yet launched initiatives to create positive impacts for supply chain workers. PFA says that at the end of 2025 it will evaluate the first year of its new supplier management approach, collecting perspectives from selected suppliers, and on that basis will consider the possibility and need for setting goals. If PFA develops positive-impact initiatives in the future, it states a process will be developed to monitor their effectiveness. For value chain workers in investee companies, PFA reports no specific targets and refers instead to its active ownership dialogue log at pfa.dk/dialoger.

PFA discloses that its Policy for responsible investments and active ownership is the framework for integrating sustainability into management and counteracting negative impacts on affected communities in investee companies, including local communities and indigenous peoples (report page 116). The policy is anchored in the UN Guiding Principles on Business and Human Rights, the UN Global Compact, the ILO Declaration on Fundamental Principles and Rights at Work, and the OECD Guidelines for Multinational Enterprises. Integration is based on screenings before and after the investment date, plus risk-based active ownership dialogue, for example following significant controversies, as elaborated in the Guidelines for sustainability risks and Guidelines for active ownership. PFA screens, monitors and reports on data points for significant negative impacts related to affected communities, including PAI indicator 11 (lack of processes and compliance mechanisms) and PAI indicator 9 (lack of a human rights policy), and refers readers to its PAI statement for further information.

PFA discloses that its influence on affected communities is exercised through active ownership, where it generally seeks to promote the integration of social risks by investee companies, including risks related to local communities and indigenous peoples, through screening, dialogue and voting anchored in its policies (report page 116). PFA reported on affected communities using a best effort approach for 2024, focused mainly on disclosure requirements relating to its policies. It has not reported specific engagement processes with affected communities beyond this active ownership mechanism and refers readers to its log of active ownership dialogues at pfa.dk/dialoger, which also includes efforts from before the reporting year. PFA states it recognises the importance of the area and is continuously working to improve data quality and develop its processes to expand meaningful and robust reporting going forward under the CSRD.

PFA does not disclose a dedicated grievance or remediation channel specifically for affected communities (report page 116). Reporting under S3 on a best effort basis, PFA primarily addresses disclosure requirements relating to its policies and states it has not reported on specific actions and objectives under the affected communities standard. For managing and channelling concerns relating to affected communities in investee companies, PFA relies on its active ownership approach, screening, dialogue and voting, and refers readers to its log of active ownership dialogues at pfa.dk/dialoger, which includes efforts from before the reporting year, and to its EU SFDR PAI statement on significant negative impacts in 2024. PFA recognises the importance of the area and states it is continuously working to improve data quality and develop its processes in line with CSRD reporting for financial institutions, pending further guidance on what level is considered adequate.

PFA discloses that it has not reported on specific actions under the affected communities standard beyond its active ownership approach (report page 116). Reporting on a best effort basis for 2024, PFA primarily addresses disclosure requirements relating to its policies and draws attention to its EU SFDR PAI statement on significant negative impacts in the reporting year. PFA states it has some positive influence in the area through active ownership, generally seeking to promote investee companies' integration of social risks, including those related to local communities and indigenous peoples, through screening, dialogue and voting anchored in its policies. It refers readers to its log of active ownership dialogues at pfa.dk/dialoger, which also includes efforts from before the reporting year. PFA notes that MSCI ESG Social Score analysis indicates limited risk in its equity and corporate bond portfolio, and that risks related to affected communities are not assessed as financially significant under CSRD.

PFA discloses that it has not set specific targets or objectives for affected communities (report page 116). Reporting under S3 on a best effort approach for 2024, PFA states it has not reported on specific actions and objectives under the affected communities standard and instead refers readers to its log of active ownership dialogues at pfa.dk/dialoger, which includes efforts from before the reporting year, and to its EU SFDR PAI statement on significant negative impacts. PFA recognises the importance of the area and states it is continuously working to improve data quality and develop its processes according to CSRD reporting for financial institutions in order to expand meaningful and robust reporting going forward. This will be done in conjunction with further guidance on what level is considered adequate for financial institutions.

PFA discloses a broad set of policies governing its work with customers, since customers represent both financial risk and opportunity (report pages 118 to 119). These cover complaint handling, information security, conflict of interest, corporate responsibility, operational risk, outsourcing, internal supervision, whistleblowing, insurance risks, personal data, approval of new and significantly changed products and services, and data ethics. For investments, the Policy for responsible investments and active ownership and Guidelines for integrating sustainability risks apply, covering social risks for end-users of investee companies' products and services. PFA's Policy for corporate responsibility incorporates the UN Guiding Principles on Business and Human Rights and the OECD Guidelines, implemented through PFA's Code of Conduct and internal business procedures. Together the policies set PFA's approach to respecting customers' human rights, safeguarding personal data, providing high-quality information, enabling complaints, avoiding unfair discrimination, and ensuring proper treatment of health insurance users. Suppliers, especially healthcare suppliers who interact with customers, must sign the Code of Conduct, and from end-2024 the largest healthcare suppliers complete a self-assessment form.

PFA discloses several channels for engaging its customers, who are central to its business model (report page 120). All customers can receive written or verbal knowledge sharing, guidance or advice and can join PFA's webinars and seminars. PFA operates a Customer Board where 70 managers from its largest corporate and organisational customers share perspectives, meeting three times a year, with the Vice President for Corporate Customers responsible for incorporating insights. It runs three advisory tables on healthy working lives involving corporate and organisational customers plus external researchers and experts, meeting at least twice a year, led by the Head of Strategic Health. In the second half of 2024 PFA launched the Online Health Support product, developed from customer feedback. At the end of 2024 PFA established a Youth Board of customers aged 18 to 30 (a potentially vulnerable group of about 180,000 customers), meeting four times a year and reporting to the Group CEO, to improve advisory services, value propositions and communication for young customers.

PFA discloses multiple channels for customers to raise concerns and obtain remediation (report pages 119 to 120). Customers can always contact their PFA contact person, submit a complaint in person or digitally, in writing or verbally, with links at pfa.dk/din-kundeoplevelse, or report suspected legal violations through PFA's whistleblower scheme. PFA's legal department is the designated complaints manager and distributes complaints to relevant departments, including Health, which handles health product cases. The complaints team prepares an annual report on customer complaints and proposes process improvements so mistakes are not repeated. If PFA has caused negative impacts by acting inappropriately or making incorrect decisions, it will rectify these following established procedures, and where it has indirectly contributed, for example via a healthcare provider, it enters dialogue with both customer and provider. The Chief Compliance Officer is responsible for the whistleblower scheme and reports annually on case numbers and types. Suppliers must have a whistleblower scheme or similar anonymous complaint mechanism.

PFA discloses extensive actions across its three strategic cornerstones of financial security, health and a good senior life (report pages 116 to 123). On financial security it offers tailored personal advice, digital pension overview tools, a focus on women and pensions (women average 25 per cent less savings), and insurance covering critical illness, loss of occupational capacity and death, including children's pensions. On health, PFA Health Insurance emphasises early help, using data and AI to identify customers at high risk of long-term illness (reducing risk by up to 70 per cent), with return-to-work efforts, the Online Health Support product, and a Strategic Health unit advising corporate customers. On seniors, PFA advises on late-life careers, developed a Danish quality standard for late-life careers, and invests in senior housing built to a 46-recommendation standard and in nursing homes with the OK Foundation. PFA also details remediation actions in 2024, including one discrimination compensation case, two healthcare supplier interaction cases, and no identified human rights violations among healthcare providers.

PFA discloses a set of time-bound annual customer targets linked to its corporate responsibility strategy, with 2024 status (report page 124, Table 22). For financial security, more than 235,000 customers to receive pension and insurance advice annually, with 269,756 achieved. For health, more than 135,000 customers to receive help to live healthier or receive financial support (143,000 achieved); more than 1,700 people with long-term illness helped back into the workforce (1,588, below target due to a changed calculation method now based on long-term sick leave claims); and more than 1,800 companies and organisations helped toward a healthier working life (2,536 achieved). For seniors, more than 75,000 seniors to receive pension and insurance advice (97,646 achieved) and more than 200 companies advised on late-life careers (251 achieved). PFA also targets DKK 2.5 billion invested in senior housing and care homes by 2030 at the latest, standing at DKK 1.7 billion. PFA follows up annually; the KPIs were not externally validated.

PFA reports (p126) that it has no single overarching business conduct policy but several. Its Policy on corporate responsibility sets the framework for good business conduct, supported by the Conflict of Interest Policy, Information Security Policy, Compliance Policy, Internal Supervision Policy, Responsible Investment and Active Ownership Policy, Remuneration Policy, Operational Risk Policy, Tax Policy, the anti money laundering and terrorist financing policy, and the market abuse prevention policy. PFA conducts its business on values of being professional, fair and responsible. Compliance, operational risk and internal supervision policies are central to risk management, with the compliance team and internal audit making independent assessments. The whistleblower scheme lets employees, customers, partners, suppliers and subcontractors report suspected violations, including corruption and bribery. The policy is at whistleblowersoftware.com/secure/pfa. Reports can be made confidentially and anonymously, hosted by an external IT supplier and independent of other PFA systems. Cases go to the Chairman of the Audit Committee and the Chief Compliance Officer, who reports to the Audit Committee and Board. PFA guarantees no retaliation for good faith reports.

PFA reports (p127) under responsible supplier management that it endeavours to make responsible purchases and places high value on proper terms and good cooperation with suppliers. PFA depends on suppliers to offer healthcare services to customers, to support all IT related matters, and to run its office operations. Its handling of impacts on the supply chain is described in the S2 Workers in the value chain standard. PFA states plainly that social and environmental criteria are not currently given weight in the selection of suppliers. Elsewhere in the section (p127) PFA notes that suppliers must sign PFA's Code of Conduct and are informed through it of PFA's requirements for good business conduct, including that PFA does not accept corruption or bribery, and that PFA conducts annual risk assessments and performs due diligence processes on suppliers.

PFA reports (p127) that business conduct, corruption and bribery are addressed across several policies, including whistleblowing, market abuse prevention, information security, operational risk, and preventive measures against money laundering and terrorist financing. Personnel policies ensure employees know PFA's anti-corruption approach, covering gifts, entertainment and conflicts of interest. New employees are informed of expectations and legal consequences on hiring; suppliers must sign PFA's Code of Conduct. PFA conducts annual risk assessments and due diligence on suppliers, and uses an automated invoicing solution with multiple approval levels to prevent corruption. PFA identifies departments most exposed to corruption or bribery risk, including PFA Asset Management (market abuse, insider trading), Corporate and Private Customers (money laundering, bribery), and IT and data access roles. Mandatory e-learning for all employees and external consultants covers personal data, money laundering prevention, information security, the whistleblower scheme, and operational risk management. Completion rates shown in Table 26 are 100 percent, with whistleblower and operational risk courses repeated every 24 months and money laundering, personal data and information security every 12 months.

PFA reports (p127) confirmed incidents of corruption and bribery for 2024 using two tables. Table 24, Number of convictions for corruption and bribery offences, records zero (0) for 2024. Table 25, Fines for violations of anti-corruption and bribery laws, records an amount of zero (0) for 2024. PFA states that incidents, including cases of corruption and bribery, are investigated promptly, independently and objectively by the compliance function or HR Legal and reported to the Executive Board and the Board of Directors. In its accounting policies (p131), PFA explains that significant incidents are reported to management under the compliance and operational risk policies, that the annual compliance report and annual risk management report cover lawsuits, convictions and significant regulatory incidents related to corruption and bribery, that all incidents are reviewed and recorded on an ongoing basis within the PFA Group, and that fines are recorded by Compliance.

PFA reports (p130) under political advocacy that, as part of the Danish pension system, it is in continuous dialogue with customers, partners, organisations, NGOs, authorities, politicians and media. Its political dialogue is limited primarily to framework conditions supporting its pension and insurance business, healthcare and senior living solutions, and a responsible green transition through investments. PFA's political dialogue relates primarily to reporting standards for climate change (E1), biodiversity and ecosystems (E4) and consumers and end-users (S4). PFA states it is politically neutral and does not support any political parties or individual candidates, so it discloses no political contributions. It found no discrepancies between its public statements and its political dialogue. PFA Pension is registered in the EU Transparency Register under REG number 491043635195-59. The Executive Board has overall responsibility for political dialogue, with larger agendas discussed with the Board. Members of the Board and Executive Board hold or have held roles in socially relevant institutions and public authorities, disclosed at pfa.dk/ledelse and pfa.dk/bestyrelse.

PFA reports (p130) under payment practices that, as a major purchaser of services and products in Denmark, it focuses on fair payment terms. To prevent late payments it has prepared a business procedure for payments setting standard payment terms used when entering supplier agreements, with particular focus on paying smaller healthcare providers promptly. Table 27 shows the average time to pay an invoice from the invoice date is 12.7 days over the 12-month period from 1 September 2023 to 31 August 2024. PFA differentiates payment terms between healthcare and non-healthcare providers to meet smaller healthcare providers' need for quick payment. Table 28 shows the share of payments made on standard conditions, for example 90.4 percent of healthcare providers on net 14 days and 76.9 percent of non-healthcare providers on net 30 days. Table 29 records zero (0) pending lawsuits due to late payments as at 31 December 2024. Average payment days are calculated from PFA's ERP system records.