Ilmarinen, one of Finland’s two largest pension insurance companies, this morning revealed another large investment in exchange-traded funds (ETFs) that track the MSCI Climate Action indices, saying it has put €580m into a new European equity fund managed by Amundi.
Juha Venäläinen, senior portfolio manager at the €57bn earning-related pension provider, said: “The Amundi MSCI Europe Climate Action UCITS ETF investment will achieve a Europe exposure in Ilmarinen’s passive equity portfolio to companies which we believe have a chance of performing better than their competitors when the business environment changes due to climate warming.”
Just a week ago, Ilmarinen announced a €2.75bn investment in US and Japanese equities via two new climate-focused ETFs – an asset switch it said had lifted the proportion of climate-focused investments in its passive equities holdings to more than 85%.
The investment announced today means that more than 95% Ilmarinen’s passive equity portfolio – valued at around €5bn – will track the indices built using the MSCI Climate Action methodology, the Helsinki-based firm said.
Ilmarinen, said the investment was a continuation of its efforts to move assets from funds taking sustainability into account more generally towards a focus on climate factors in fund investments.
Amundi said today’s ETF launch, which is anchored by the Ilmarinen investment, added to its existing range of more than 30 climate ETFs aligned with the goals of the Paris Agreement, and aimed to give investors “a more flexible option for responsible investing beyond a one-size-fits-all approach”.
Under the MSCI Climate Action index methodology, companies in each sector are rated using four climate indicators – current emissions, rate of emission reduction, business focused on climate opportunities and climate risk management – and the “top half” of each sector by count then included in the index, according to Ilmarinen.
The Finnish mutual pensions insurer, which is aiming for a carbon-neutral investment portfolio by the end of 2035, has been working over the last few years to orientate its assets towards climate considerations and has helped initiate and develop several new ETFs alongside asset managers and index providers.
Commenting on the geographical focus of the latest ETF investment, Venäläinen said Europe had been a leader in mitigating climate change.
“The expansion of emissions trading and tightening of climate regulation increase companies’ cost pressures but also offer new markets for innovative products,” he said.
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