Water is Ilmarinen’s most important natural resource exposure

Earnings-related pension insure company Ilmarinen has analysed the impacts and exposure of its investments to biodiversity. The analysis covered direct listed equity investments and direct corporate bond investments.

“The analysis helps us identify sectors and companies where we will focus our engagement efforts. It also provides background information to support that work. In addition, the analysis helps integrate nature-related considerations into risk management,” says Karoliina Lindroos, Head of Responsible Investment.

According to the analysis, water-related ecosystem services are the most significant nature dependencies in the portfolio: around 20% of the investee companies show a very high or high dependency on surface water. The second most significant dependency relates to groundwater, where the corresponding figure is around 10%.

Water use and water pollution also stand out as key drivers of nature impacts. Other significant drivers include soil pollution, solid waste and greenhouse gas emissions.

Ilmarinen focuses its engagement on sensitive sectors

Based on the analysis, in 2025 around 37% of Ilmarinen’s direct listed equity investments and direct corporate bond investments were allocated to sectors where nature impacts and dependencies play a significant role. In 2024, the corresponding figure was one percentage point higher (38%). The results of the analysis reflect changes in the portfolio structure and in the weights of certain sectors and companies.

The largest exposures relate to the semiconductor industry, the energy and water utilities sector, the pulp and paper and forestry industry, and the pharmaceutical industry. These same sectors also ranked in the top four in the previous year.

“In our engagement work, we focus in particular on these four sectors,” Lindroos says.

Significant results in biodiversity work for domestic real estate in 2025

The nature analysis of Ilmarinen’s investments forms part of its reporting aligned with the Taskforce on Nature-related Financial Disclosures (TNFD). It also reviews the progress of Ilmarinen’s biodiversity plan for its domestic real estate portfolio. Ilmarinen is one of Finland’s largest real estate owners and a significant responsible developer.
“Promoting biodiversity is an important activity in  our domestic real estate business, guided by the biodiversity plan prepared for our domestic real estate investments,” Lindroos says.

The plan makes biodiversity work a systematic part of decision-making, project development, contracts and property maintenance throughout the asset life cycle.

“In 2025, we reached several key targets set out in the plan. As our most significant step forward, we carried out site-specific nature assessments in all of our domestic properties where the state of nature can be improved. In total, assessments were completed for 87 properties, meaning that the entire eligible property portfolio was already covered in 2025 – two years ahead of the original schedule,” Lindroos says.

Going forward, the nature assessments will form a key knowledge base both for property-specific measures and for evaluating nature impacts across the entire real estate portfolio.

Nature loss can have significant economic impacts

Ilmarinen’s mission is to invest pension assets profitably, securely and responsibly so that it can pay pensions now and in the future. The economy is deeply dependent on natural capital and biodiversity.

“Biodiversity loss is a systemic risk that can have significant economic impacts on society, companies and investors. That is why we aim to continuously develop better ways to take biodiversity into account in our investment activities.”