In its assessment, which was conducted for the second time, the PRI compared investors’ climate reporting performance. According to the assessment, Varma has excellent climate reporting practices.
Varma’s Director of Responsible Investment Hanna Kaskela says that good climate reporting requires investors to set clear targets and implement ambitious actions to mitigate climate change.
“Mitigating climate change is one of Varma’s key sustainability targets. We aim for a carbon-neutral investment portfolio gradually by 2035, and we work every day to achieve this goal. A concrete example of this is our revamped sustainable equity portfolio, which focuses on climate-friendly investments and reducing its carbon risk quarter by quarter,” Kaskela says.
According to Kaskela, Varma aims to be at the forefront in climate reporting.
“We put a lot of effort into explaining the financial risks and opportunities related to climate change in our annual and sustainability reporting. We disclose, for example, the share of industries exposed to the climate-related risks in our portfolio and which industries make up the majority of our carbon footprint,” she says.
The 2020 PRI assessment examined the transparency of the reporting, the adoption of responsible investment practices in all asset classes, inclusion of climate change in company-level strategies and good governance. Varma received, for the second year in a row, the highest score of A+ for its responsible investment strategy and governance.
Varma has also previously received recognition for its reporting on climate-related issues. In 2019, Varma’s sustainability report was ranked number one in the climate change category of a sustainability reporting competition. As part of its annual and sustainability reporting, Varma reports on climate-related matters according to the recommendations of the international Task Force on Climate-related Financial Disclosures (TCFD).
Companies’ open disclosure of climate-related risks and opportunities makes investors’ reporting easier
According to Kaskela, increased reporting on climate actions, and risks and opportunities caused by climate change by companies also makes it easier for investors to develop their own climate reporting.
“The more openly investees disclose their climate-related financial risks and the opportunities by climate-change mitigation, the better investors’ reporting on climate-related issues will be. Data on responsible investment tends to be backward-looking, but fortunately forward-looking data is also developing. One of our climate targets is to make data development a focal point of both portfolio management tools and reporting,” Kaskela adds.
By providing a list of exemplary investors, the PRI wants to shine a spotlight on the best operating models for promoting responsibility. There are more than 2,000 signatories to the UN Principles for Responsible Investment, and this year, 36 investors globally were included in the PRI Leaders’ Group of responsible investment.
The list of the best investors is published on the PRI’s website, which also contains a summary of the leading investors’ best practices in responsible investment.
Varma Mutual Pension Insurance Company is a responsible and solvent investor. The company is responsible for the earnings-related pension cover of some 900,000 people in the private sector. Premiums written totalled EUR 5.3 billion in 2019 and pension payments stood at EUR 5.9 billion. Varma’s investment portfolio amounted to EUR 45.3 billion at the end of June 2020.
Additional information:
Hanna Kaskela, Director, Responsible Investment, tel. +358 40 584 5045,
hanna.kaskela(at)varma.fi
Suvi Vesterinen, Communications Manager, Varma, tel. +358 40 555 8029,
suvi.p.vesterinen(at)varma.fi