In its assessment made public in Paris, the UN-supported Principles for Responsible Investment (PRI) included Varma in the PRI Leaders' Group for its responsible investment work.
In its assessment, which was carried out for the first time, the PRI focussed on identifying investors with excellent responsible investment practices when selecting and monitoring external investment managers and their operations. The evaluation focused on listed equity and private equity. Varma was included in the PRI Leaders' Group in both asset classes.
“Responsibility is integrated in Varma’s investment operations. When selecting funds, we pay attention to whether they are in line with our responsible investment policies. We also take a look at how the practices and operations of the managers we have chosen move forward from year to year,” says Varma’s CIO, Reima Rytsölä.
By providing a list of exemplary investors, the PRI wants to shine a spotlight on the best operating models for promoting responsibility. For the assessment, the PRI compared how investors take environmental, social and governance perspectives into account. The assessment focused especially on governance, the implementation of responsibility and transparency.
“We require our equity funds to have a responsible investment policy in place. We conduct screening to make sure they meet international norms regarding, for instance, the use of child labour and the fulfilment of human rights. We also include passive index funds in our carbon footprint calculations, and we report on the carbon footprint of funds annually,” says Varma’s Director of Responsible Investment, Hanna Kaskela.
“Developing responsibility in investment operations is a continuous effort. We will have access to even better information about investees once the utilisation of data improves,” Rytsölä points out.
“The development of index funds in an increasingly responsible direction is a key factor in the global development of responsible investment. Change is needed particularly in that respect,” says Kaskela.
There are 47 investors in the PRI Leaders Group. Only around one out of ten of the PRI signatories made it onto the list of the best companies. The list of investors is published on the PRI’s website, which also contains a summary of the leading investors’ best practices in responsible investment.
New climate policy for investments being drawn up
Varma is currently preparing the company’s new climate targets. The current climate policy was published in 2016; in it, Varma committed to adapt its investments to the Paris agreement.
“According to a report by the Intergovernmental Panel on Climate Change (IPCC), urgent measures are needed to reduce emissions. Giving up fossil energy calls for action from everyone, including investors,” stresses Kaskela.