Varma has drawn up Principles for human rights to promote sustainability

According to our assessment, Varma’s operations have a key impact on the realisation of human rights with respect to three groups: our investees, personnel and supply chain.

“Human rights have become increasingly important in the past few years. Russia’s war of aggression against Ukraine also brought sustainability themes related to governments’ actions under scrutiny in a new way. As global political events have unfolded, we have taken an even closer look at the sustainability of our investments in terms of geography and governments,” says Sustainability Director Hanna Kaskela.

Observing human rights has been a priority in Varma’s sustainability efforts this year and one of the most important themes of our sustainability programme, which was published in the spring. Besides surveying human rights, we have also provided Varma employees with training in human rights sustainability. The training efforts have been targeted to functions where we have identified major human rights impacts.

We extended the monitoring of norm violations to private credit investments

In our investments, we surveyed human rights risks and impacts on different continents and in various industries, particularly in investment funds. Different human rights risks and impacts are highlighted in different industries and geographical areas and countries.

Varma firmly intervenes in the human rights violations of its investees. We monitor the realisation of human rights as well as possible human rights violations by screening for norm violations. This year, we extended our screening process to cover private credit, in addition to equity and bond investments.

We classify violations into one of three categories: blacklisted investments, i.e. companies we do not invest in; investees that are involved in an engagement process; and investees that are on an observation list. We use various means of engagement in the different categories.

“Since the beginning of 2022, Varma has had a total of 67 active engagement processes in which we have addressed violations of international agreements either alone or together with other investors. Of these, 21 have been human rights violations. Not all engagement processes have concerned our own investments,” says Kaskela.

Monitoring compliance with international agreements and national laws on human rights in investments is part of identifying sustainability risks. Human rights violations are included in sustainability risks, which may have a negative impact on investments.

Principles support compliance with human rights due diligence

In our human rights assessment, we have also identified human rights risks and impacts affecting our own personnel. Varma has practices and processes in place for addressing violations concerning the company’s own personnel. Guidelines and steadfast, systematic intervention promote a work community that is free from harassment or other inappropriate conduct.

We also require our supply chain to respect human rights. Suppliers must be able to demonstrate, upon request, the controls they have in place to ensure that human rights are realised in their operations and supply chain. Human rights abuses must be addressed, and corrective measures must be taken without delay.

Varma is committed to operating in accordance with the United Nations Guiding Principles on Business and Human Rights. The principles include a human rights due diligence process, which means that companies must identify, prevent, mitigate and address the negative human rights impacts of their operations. Our Principles for human rights supports us in complying with this due diligence requirement. Moreover, they complement our existing active ownership and engagement principles.

For more information, please contact:  

Hanna Kaskela, Sustainability Director, tel. +358 40 584 5045, hanna.kaskela(at)varma.fi 

Hanna Leskelä, Communications Manager, tel. +358 40 703 5164, hanna.leskela(at)varma.fi