Varma ranks fifth in the global climate index

“At Varma, climate issues are an integral part of decision-making related to investments. A good ranking in an international comparison shows that we are committed to our goals,” says Varma’s Chief Investment Officer, Reima Rytsölä.

The Asset Owners Disclosure Project (AODP) is an international, independent organisation that aims to promote reporting related to carbon risks and the management of financial risks related to climate change. The climate index ranks the world’s 100 largest pension investors, who disclose information about their financial statements, principles for responsible investment, climate strategy and governance to the AODP.

Varma has substantially reduced its carbon footprint over the past few years: the carbon footprint of the company’s equity investments, for example, has been reduced by 27% in two years. In the longer term, the entire investment portfolio is being adapted to meet the targets of the Paris Climate Agreement. Three years ago at the Climate Change Conference in Paris, the participating countries agreed on limiting greenhouse gas emissions as a means of keeping global warming below two degrees C.

“Varma has focussed its investments on low-emission industries and reduced its ownership in oil and gas companies. For example, the number of direct oil stock holdings is negligible,” says Rytsölä.

No more investments in coal-dependent electricity production and coal mines

It has already been three years since Varma discontinued its direct equity investments in electricity companies that rely on coal for their production, and Varma does not invest in coal-mining operations at all.

“Varma’s portfolio managers have worked hard to ensure that our investments are in line with the Paris Climate Agreement. This has meant selecting responsibly operating companies as investment objects,” explains Director of Responsible Investment Hanna Kaskela.

The emissions of real estate investments have been reduced by improving energy efficiency and switching to renewable energy. Solar power plants have been installed in the properties owned by Varma. A further goal is to reduce the weight of fossil-based industries in unlisted companies.

Influencing companies directly through co-operation initiatives

Active influencing has become an increasingly important form of responsible investment, as pension investors aim to promote climate matters directly in companies. Varma is also part of international co-operation initiatives in which investors demand that companies bear responsibility for the environment and take climate risks into account.

Implementing the targets of the Paris Climate Agreement also requires that large index funds increase their investments in low-carbon alternatives.

“The better large index funds take climate matters into account, the less demand there will be for investment objects that burden the environment,” says Kaskela.

Further information:

Reima Rytsölä, CIO, tel. +358 10 244 3180 or firstname.lastname@varma.fi 

Hanna Kaskela, Director of Responsible Investment, tel. +358 40 584 5045 or firstname.lastname@varma.fi 

Katariina Sillander, Sustainability Manager, tel. +358 40 709 9836 or firstname.lastname@varma.fi