We have updated our Principles for Investee Engagement. These new principles will replace our previous Active Ownership and Engagement Principles.
The new principles are based on our strategy renewed in 2025 and are aligned with our sustainability programme we updated last year. We concentrate on meaningful actions by directing our efforts where we can make the greatest impact. We will primarily target Finnish companies and areas within the investment value chain where the potential for influence outcomes is strongest.
“Engagement is our most important tool for promoting sustainability. In responsible investment, impact is ultimately defined by our actions as an investor. As a shareholder, we exercise our ownership rights through voting, participation in nomination committees, and direct dialogue with companies. Our priority is engagement, not exclusion,” says Hanna Kaskela, Senior Vice-President, Sustainability.
Engagement is divided into reactive and proactive approaches
The principles cover Varma’s direct investments, fund management companies and the underlying holdings of funds across all asset classes, excluding government bonds.
Our engagement work will consist of two complementary components:
- Reactive engagement – addressing identified risks and norms-based violations
- Proactive engagement – promoting sustainable practices based on pre-defined themes
The goal of reactive engagement is to ensure that the investee company remediates the situation and prevents similar incidents in the future. Engagement may be carried out directly by Varma or indirectly through third parties, using an approach suited to the company and context.
Proactive engagement is guided by a plan drawn up in advance. We promote sustainability by influencing investee companies on themes that are material for portfolio resilience, risk management and long-term value creation.
Annual engagement themes provide a structured focus
We will implement engagement in a more systematic way through annually defined thematic focus areas. These may include climate, biodiversity and ecosystems, human rights, themes related to technology and AI, or other sustainability topics relevant to investment.
We have also defined when we engage directly and when we work through service providers or together with other investors.
The updated principles also place greater emphasis on monitoring and transparency. We will strengthen the monitoring of our engagement activities and report more clearly on their outcomes.
Means of engagement
- As a shareholder, we engage by attending and voting at general meetings of the companies we invest in, taking part in nomination committee work, and meeting with and maintaining dialogue with company management and fund management companies.
- Investors can also engage, for example, through a service provider together with other investors, or by taking part in international engagement initiatives and campaigns.