Varma is investing €500m in a tailor-made exchange-traded fund (ETF) providing exposure to a basket of Japanese low-emission stocks, as part of its efforts to meet its climate target.
The new ETF – which was listed on the Tokyo Stock Exchange on 3 December – aims to invest in Japanese companies that have set science-based emission reduction targets, and are actively working to lower their carbon dioxide emissions, the €63.2bn Finnish mutual pension insurance company said yesterday.
Timo Sallinen, Varma’s head of listed securities, said: “This is a cost-effective way to support positive climate development and at the same time generate returns from the Japanese market.
“It is a continuation of our previous climate-sensitive ETF fund investments in the markets of the United States, Europe and developing countries,” he said.
Over the last few years, Varma, and its peer Ilmarinen, have seeded and helped design several ETFs tracking equity and fixed income indices with climate-related tilts or environmental themes.
The occupational pension provider said the new investment was related to its own climate targets, and said it was the only Finnish pension insurance company to have set its climate goals in accordance with the international climate initiative science-based targets (SBT).
As part of its climate targets, Varma said it was committed to raising the proportion of companies that had set SBT targets within its listed equity investments and fixed income assets, as well as in real estate funds, to 51% by 2027.
Sallinen said Varma would continue to develop new ETF products that took sustainability aspects into account, stating that Nomura was one of the pension provider’s key partners.
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