Bank of Finland sets new interim climate targets for its investment activities and updates its responsible investment principles

The interim targets concern different asset classes and include both qualitative and quantitative targets. The new targets are to be achieved by the end of 2030. The main changes concern equity and corporate bond investments, whereas the qualitative targets for other asset classes remain unchanged.

The reduction target for the emissions intensity of equity investments by the end of 2030 is raised from 50% to 60% (compared to the first-quarter 2021 baseline). In addition, 75% of equity investments will have to be in investment products that have a climate and/or ESG objective. This new quantitative target replaces the previous qualitative target.

A new target for corporate bond investments is to bring to an end investments connected with thermal coal mining and coal-based power generation. The previous sector-specific limits for corporate bond investments connected with fossil fuels remain in force but are incorporated into other responsible investment restrictions.

Implementation of the interim targets will be monitored and reported on regularly. The next new interim targets will be set in 2030 at the latest.

The Bank of Finland’s responsible investment principles have been updated to accord with the new targets.

Table: Bank of Finland’s new interim targets

Asset classes	Interim targets
Equities	60% reduction target in emissions intensity for the entire equity portfolio by the end of 2030 compared to the Q1/2021 baseline. By the end of 2030, at least 75% of equity investments will be allocated to investment products with a climate and/or ESG objective.
Corporate bonds	Sector-specific targets: 0% of revenue from thermal coal mining by the end of 2030 0% of revenue from coal-based power generation by the end of 2030
Government bonds	Contribute to public discussion on climate change and encourage governments to set adequate nationally determined contributions in line with the Paris Agreement on climate change
Government-related debt instruments	Encourage government-related issuers to set climate targets for their own investment activities
Real estate funds	The asset manager or product has a sufficiently comprehensive and ambitious climate target/impact (applies to current and new asset managers)
Other investments managed by asset managers	The asset manager or product has a sufficiently comprehensive and ambitious climate target/impact (applies to current and new asset managers)