Varma sharpens its climate policy: Investment portfolio’s absolute emissions to be cut in half by 2030


Varma is sharpening the climate policy for its investments and its investment targets aimed at combating climate change. The goal is to cut the entire investment portfolio’s absolute emissions by 25 per cent by 2025 and by 50 per cent by 2030. Setting absolute emission targets for an entire investment portfolio is rare both in Finland and globally.

"Reducing carbon intensity alone is no longer enough: emissions must also be reduced in absolute terms,” stresses Varma’s Sustainability Director Hanna Kaskela.
"Reducing carbon intensity alone is no longer enough: emissions must also be reduced in absolute terms,” stresses Varma’s Sustainability Director Hanna Kaskela.

The value of Varma’s investment portfolio is close to EUR 58 billion. The goal is to reduce the portfolio’s emissions by 25 per cent by 2025 and by 50 per cent by 2030 compared to the level at the end of 2021. Climate change mitigation has been a goal of Varma’s investment activities since 2016.

“Achieving a carbon-neutral investment portfolio by 2035 requires significantly reducing greenhouse gas emissions within all asset classes. In addition, the share of investments classified as carbon sinks, such as forest investments, should be significantly increased in the portfolio. That is why we have set a new goal of reducing the absolute emissions of Varma’s entire investment portfolio. Reducing carbon intensity alone is no longer enough: emissions must also be reduced in absolute terms,” stresses Varma’s Sustainability Director Hanna Kaskela.

According to Kaskela, a major investor setting absolute emission targets on its entire investment portfolio is unheard of in Finland and rare even on a global scale.

“All companies and investors must substantially reduce their emissions in order to limit global warming to 1.5 °C in line with the Paris Agreement. These measures are urgent, as according to the World Meteorological Organization’s (WMO) latest estimate, there is a 50 per cent chance the global temperature will increase by 1.5 °C already by 2026. As a responsible investor, we want to help achieve this target of limiting global warming,” says Kaskela.

Varma has already reduced the emissions of its investments: at the end of last year, the carbon intensity of its listed equity investments, i.e. the ratio of greenhouse gas emissions to companies’ revenue, had decreased by 30 per cent and corporate bond investments by 23 per cent from the 2016 baseline.

The updated climate targets make Varma’s investments more impactful, as they cover all asset classes in Varma’s investment portfolio, including unlisted investments. The previous targets covered only listed equities and corporate bonds.

Coal and oil exploration blacklisted – environmentally friendly share of investments growing

With the updated climate policy, Varma will also introduce stricter criteria for negative screening. The goal of the Paris Agreement requires a significant reduction in the use of fossil fuels, and Varma excludes coal-based businesses and projects from its new investments.

“We do not make new investments in companies that rely on coal-based operations for more than 10% of their revenue, production or production capacity. The previous corresponding figure was 30%. These types of companies can only be invested in if the companies have science-based emission reduction targets to limit global warming to 1.5 °C. We also do not finance coal-based projects, nor do we invest in companies that are planning new coal-based investments. We are committed to exiting from all thermal coal investments by 2025 and oil exploration investments by 2030,” says Kaskela.

Investments in coal and oil exploration do not play a strategic role in Varma’s investment operations. At the end of last year, 2.6 per cent of Varma’s investments in listed equities were in companies that rely on coal for more than 5 per cent of their business, and 0.4 per cent were in companies that rely on oil exploration for more than 5 percent of their business.

Varma utilizes a low carbon roadmap for electricity generation in all asset classes. This means that investments in fossil-based electricity generation will decrease and the share of renewable energy will grow to at least half of electricity generation investments by 2030.
Varma’s goal is also to increase the climate-friendly investment allocation to 25 per cent of the entire portfolio by 2025. The climate allocation accounted for 18.4 per cent of Varma’s total investments at the end of 2021.

New targets already show in Varma’s investments: the USA fund is one of the largest funds that accords with the Paris Agreement

Varma’s updated climate targets are concretely reflected in, among other things, the sustainable USA and European equity funds the company has developed. The investment policy for both ETFs is being aligned with the Paris Agreement on Varma’s initiative.

“The emissions of both ETFs are at least 50 smaller than ordinary funds, and their emissions will decrease further at a rate of 7 per cent per annum. At the start of June, due to changes in the fund, all companies producing coal and companies that rely on oil for more than 10 per cent of their revenue were excluded from the portfolios. The ETF investing in the USA will be the world’s third-largest Paris-aligned USA–ETF,” says Varma’s Responsible Investment Analyst, Vesa Syrjäläinen.

At the turn of the year, Varma had a total of more than EUR 1.5 billion invested in both funds, with the USA fund accounting for a larger share. Varma implemented the investment funds in 2019 together with the asset management company Legal & General Investment Management (LGIM) and the index investment company Foxberry. The changes entered into force in both funds on 9 June 2022.

“In the near future, we will provide information on our new investments, which are also Paris-aligned. Our concrete measures to build a carbon-neutral investment portfolio and to mitigate and adapt to climate change continue,” Kaskela promises.

Media contacts:

Hanna Kaskela, Sustainability Director, Responsible investment and sustainability, tel. +358 40 584 5045, hanna.kaskela(at)

Vesa Syrjäläinen, Responsible Investment Analyst, Varma, tel. +358 50 311 2185, vesa.syrjalainen(at)

Katri Viippola, Senior Vice-President, HR and Communications +358 400 129 500 or katri.viippola(at)

Suvi Vesterinen, Communications Manager, tel. +358 40 555 8029, suvi.p.vesterinen(at)



"Reducing carbon intensity alone is no longer enough: emissions must also be reduced in absolute terms,” stresses Varma’s Sustainability Director Hanna Kaskela.
"Reducing carbon intensity alone is no longer enough: emissions must also be reduced in absolute terms,” stresses Varma’s Sustainability Director Hanna Kaskela.


About Varma

Salmisaarenranta 11
00180 Helsinki

010 2440

Varma Mutual Pension Insurance Company is a responsible and solvent investor of pension funds. The company is responsible for the statutory earnings-related pension cover of some 909,000 people in the private sector. Premiums written totalled EUR 5.6 billion in 2021 and pension payments stood at EUR 6.2 billion. The company’s investment portfolio amounted to EUR 57.6 billion at the end of March 2022.

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