Varma Mutual Pension Insurance Company, the most solvent earnings-related pension company and largest private investor in Finland, has analysed of the carbon footprint of its investments, specifically its listed equity and corporate bond investments, and its real estate investments.
The calculation covers EUR 16 billion, i.e. 39% of Varma's EUR 41.3 billion investment portfolio, and reflects the situation at the end of 2015. The carbon footprint of investments is a measure of the annual greenhouse gasses generated by the investee companies. For investors, the carbon footprint is one way of assessing the carbon risk and climate impacts of their assets. Varma will, from now on, measure and disclose the carbon footprint of its investments annually.
A carbon footprint helps meet climate policy targets
Mitigating climate change is one of Varma's CSR targets. Varma's climate policy for investments will be published by the end of May.
“The carbon footprint report is part of a broader analysis where we charted the impacts of climate change on our investments and how we can best promote the mitigation of climate change. We used the results to set targets for our climate policy," says Varma's Executive Vice-President, Investments Reima Rytsölä.
The assessment of Varma's listed investments was carried out by South Pole Group, which specialises in calculating carbon footprints, and it covers both direct greenhouse gas emissions from sources owned or controlled by the companies, and indirect emissions from the generation of mostly purchased electricity.
Varma joins Montréal Pledge and CDP
Varma has joined the Montréal Carbon Pledge initiative supported by the Principles for Responsible Investment (PRI) and the United Nations Environment Programme Finance Initiative (UNEP FI). Under the Pledge, investors commit to measure and publicly disclose the carbon footprint of their listed equity investments on an annual basis.
Varma has signed the CDP (formerly Carbon Disclosure Project), which compiles data on companies' greenhouse gas emissions and other climate-change-related data.
(Source: STT, Varma)