Varma makes record-breaking investment in a climate fund in the US market

Varma is making its largest single investment to date in an exchange-traded ETF fund listed on the US market. The €2.3 billion investment is also the largest ETF launch ever made. The new climate-impacting ETF was listed on the New York Stock Exchange on December 12, 2024.

"We wanted a cost-effective fund tailored to our climate goals and operating in the US market. The investment serves well the objectives of our investment strategy, which are related to responsible investment and geographical diversification of investments. This is a liquid instrument and gives us flexibility when investing our assets totaling approximately EUR 63 billion," says Timo Sallinen, Head of Listed Investments at Varma.

The fund, tailored for Varma, invests in global companies that meet certain environmental and climate criteria. The companies in the fund have a proven track record of reducing carbon dioxide emissions and environmental responsibility.

ETFs are passive funds, which means that they do not have a portfolio manager, but strive to follow the selected index as closely as possible. Varma's new ETF follows the MSCI Global Climate 500 North America Selection index. This index includes companies that represent the best in their industry, taking climate perspectives into account. 

ETFs are a cost-effective way for institutional investors to invest funds to meet specific goals in their investment strategy. Since the ETF is listed on an exchange, the liquidity of the fund is good, meaning that trading or selling the fund is fast. In ETFs, assets are also widely diversified. 

The launch was carried out by Invesco, a leading global asset manager firm. Invesco and Varma collaborated earlier this year to launch an ETF climate fund, in which Varma invested EUR 1.5 billion.

"We are very pleased with the cooperation with Invesco. This fund investment is a continuation of our previous investments in exchange-traded ETFs," says Timo Sallinen.

Tailored ETFs support Varma’s climate targets

Varma has also made other investments in climate-impacted ETFs tailored to its needs, which are traded in Japan, Europe and emerging markets.

The investment is related to Varma's own climate targets. Varma is the only Finnish pension insurance company to have set its climate targets in accordance with the international climate initiative SBT.

The vast majority of Varma's emissions are caused by the emissions of investees outside Varma's own operations. By investing in companies that are making progress in reducing their carbon footprint and promoting low-emission initiatives, investors can support global efforts to combat climate change.

For further information: 

 Timo Sallinen, Investment Director, Listed Investments, tel. +358 10 244 7645 or Timo. Sallinen(at)varma.fi

Marjut Tervola, Communications Manager, tel. + 358 45 673 0120 or marjut.tervola(at)varma.fi