Ilmarinen today announced new progress in firming up its plan for reducing the greenhouse gas emissions its investment portfolio is responsible for, by adding details of how two more asset classes would contribute to the goal.
The €55.8bn Finnish pension fund said in a statement that it was setting climate goals for two new types of assets – corporate bonds and foreign real estate.
Climate plans had already been drawn up for direct listed equity investments and domestic real estate, it said.
Niina Arkko, senior responsible investment specialist at Ilmarinen, told IPE that the institution’s overall net zero 2035 target, which was announced in 2020, covered all asset classes, and that its asset class-specific roadmaps, such as the latest two announced today, set out interim targets, actions points and indicators to monitor progress towards the 2035 goal.
Mikko Mursula, the Helsinki-based pension institution’s deputy chief executive officer, said: “Our task is to invest pension assets productively and securely.
“The key is to take into account aspects related to the environment, society and good governance, i.e. the so-called ESG aspects, in every investment decision,” he said.
Karoliina Lindroos, head of responsible investing at the mutual pension insurance company, said: “Our climate work is based on continuous learning and development. That’s why we update our existing climate roadmaps and prepare new roadmaps for each type of capital.”
The announcement comes a day after Varma – Ilmarinen’s closest rival and peer in the earnings-related pension system in which they both operate – unveiled a new step in its ESG work, saying it was now giving equal priority to biodiversity as it was to climate.
Back in June, Varma said it was tightening its climate policy by adopting a target for reducing the emissions of its investment portfolio on an absolute basis, rather than by cutting carbon intensity.
It also said it was making all its assets subject to the new target, whereas the goals had previously only applied to listed equities and corporate bonds.
Regarding Ilmarinen’s move to include international property in its climate roadmap, Mikko Antila, head of international real estate, said a significant part of Ilmarinen’s international real estate investments were made through real estate managers.
“Cooperation with managers and influencing their activities is central to the implementation of the road map. We do it constantly,” he said.
As part of its climate goals for real estate, Ilmarinen said it now aimed to measure its entire property portfolio using the global ESG benchmark for real assets GRESB, up from a goal of 70% coverage in 2021.
For international real estate, Ilmarinen also said it planned to reduce the carbon footprint and energy consumption of those investments by 15% by 2025 and by 25% by 2030.
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