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Responsible investment

We are investing in a secure future.

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The climate is not waiting for retirement. That is why we are investing responsibly now.

At Varma, we invest the pension assets of Finns in companies that strive to make the world more sustainable. That also makes all of Varma’s customers and pension recipients responsible investors.

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Responsible investment key figures

50.2

Value of investments in billions of euros

-47%

Emissions from Varma’s real estate over five years

6.2

Value of the climate allocation in billions of euros

What does responsible investment mean to us

Responsible investment is our way of securing future pensions and building a world that is sustainable for future generations.

When you take out earnings-related pension insurance with Varma, you ensure that your pension assets are always managed according to the most ambitious principles of responsible investment. Our investment portfolio of EUR 50.2 billion is significant even on a global scale, and it is also why we have a considerable impact, for instance, on mitigating climate change.

Our climate goals and progress in achieving them

Our climate goals are ambitious

Climate change mitigation has been one of the main goals of Varma’s responsible investment for many years now. We invest in companies, funds and real estate that create solutions for reducing emissions and take climate-related risks into account in their operations. In particular, we are constantly on the lookout for companies that benefit from climate change mitigation in their operations, for example, by creating products and services to replace fossil fuels.

Our main goal is to achieve a carbon-neutral investment portfolio by 2035.

  • We are committed to exiting from thermal coal investments by 2025 and to excluding oil exploration by 2030.
  • We are gradually reducing emissions in different asset classes (e.g. in equities).
  • In our real estate, we aim for fossil-free electricity and heating by 2025 and 2030, respectively.

Taking steps towards carbon-neutral portfolio

We have almost reached our goal to exit fossil investments, as there are only a handful of such investments remaining. We are also gradually reducing the emissions of different asset classes.

This is how we are doing it

Our principles for responsible investment

We are committed to ambitious sustainability goals and principles.

Responsibility in investment operations means that alongside investment return expectations, we take into account sustainability criteria related to the environment, society and people, as well as good governance. We thus aim to ensure that our investee companies operate responsibly and do not, for example, violate human rights, engage in corrupt business or cause environmental damage.

Responsible investment practices and ground rules are constantly evolving, and Varma intends to be at the forefront of sustainable investment also going forward.

New investments

We invest in sustainable companies.

We increasingly invest in companies that take climate change into account in their operations and develop solutions to mitigate it.

Our goal is for the climate allocation to make up 20% of our investment portfolio by 2025. This comprises investees whose business benefits from actions to mitigate climate change and whose operations do not cause significant emissions. Included are equity investments in companies with ambitious emission-reduction targets, our green bond investments and our properties with emission-free energy consumption.

Investments we avoid

We exclude or exit from investments that we do not consider to be sustainable.

There are some industries that we do not invest in at all. These include, but are not limited to, manufacturers of tobacco products and controversial weapons (nuclear arms, etc.) and companies that rely on coal or lignite in their operations. Besides coal producers, oil exploration and electricity producers with coal-based operations are also excluded.

We will exit from all thermal coal investments by 2025 and from oil exploration by 2030. Since 2015, we have already excluded from our direct investments companies with coal- or lignite-based operations accounting for more than 30% of their net sales, production capacity or production.

Engagement

We drive our investees towards more sustainable operations.

Varma has a socially significant role in determining the future direction of the companies it invests in. We influence the operations of our portfolio companies, and we encourage them to make more sustainable choices. We demand climate reporting from companies, and we require them to take sustainability into account in their strategic decision-making. We may also exit from an investment if our sustainability requirements are not met.

Joint engagement projects (pdf)

Real Estate

With the built environment accounting for roughly 40% of Finland’s emissions, achieving emission-free energy consumption in buildings matters. Varma is modifying the office premises and flats under its ownership to make them carbon neutral – the heating in some of our rental homes is already carbon neutral.

Read more about the environmental impacts of our real estate investments in our Annual and Sustainability Report.

Other current topics of responsible investing

Human rights

Varma assertively intervenes in the human rights violations of its investees. Human rights secure the right to a dignified life for everyone, and investors have the power and responsibility to keep a keen eye on how human rights are respected in companies. Human rights violations relate to, among other things, the use of child labour in developing countries, but occupational health and safety, a living wage and cyber security are also human rights issues.

Sustainable equity portfolio

We have a special sustainable equity portfolio that promotes the UN’s goals (SDG) and Varma’s climate targets. The chosen themes for the portfolio include responsible consumption, circular economy and climate-change mitigation. It invests in listed equities in Europe, the US and Canada and in the developed markets of Asia.

Biodiversity

A million animal and plant species are threatened with extinction, many within decades. Investors are concerned about the loss of biodiversity, and so is Varma. We want to identify investments that can help reduce the risk to biodiversity.

Reporting and additional information

Reporting and additional information

Current issues

Contact

Reima Rytsölä
Reima Rytsölä
Deputy CEO, Investments
+358 10 244 3180
Hanna Kaskela
Hanna Kaskela
Director
+358 40 584 5045
hanna.kaskela@varma.fi
Responsible Investments
Katariina Sillander
Katariina Sillander
Communications and Sustainability Manager
+358 40 709 9836
katariina.sillander@varma.fi
Corporate responsibility
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