Varma Pension Insurance Company has invested USD 240 million (approx. EUR 196 million) in Nordea’s sustainable investment fund that invests in the emerging markets. The investment was made because it supports Varma’s climate targets and contributes to the UN’s sustainable development goals, which are important to Varma. Taking environmental and other sustainability aspects into account is especially important in the emerging markets.
“Varma has an investment portfolio valued at EUR 47 billion, and sustainability is an integrated part of our investment process. We want to be an active, responsible investor globally, and we were looking for a product for the emerging markets. Nordea has a highly efficient process in responsible investments, and the fund has a solid track record. Thus, the fund is a good fit for our portfolio,” says Timo Sallinen, Head of Listed Securities at Varma.
Nordea’s Emerging Stars Equity Fund invests globally in the emerging markets. The fund’s investment decisions are guided by corporate social responsibility (CSR) and environment-related issues, alongside actual financial key figures.
Kaisa Ojainmaa
According to Kaisa Ojainmaa, Varma’s Senior Portfolio Manager, the fund’s low carbon intensity and active contribution to the UN’s Sustainable Development Goals also contribute to the achievement of Varma’s own climate-related and sustainable investment goals.
Ojainmaa adds that considering ESG viewpoints and risks is important particularly when investing in the emerging markets. Varma’s listed equity investments in the emerging markets are valued at approximately EUR 2 billion.
ESG data
“ESG data is not yet as widely available in the emerging markets as it is in the developed markets. That is why we believe the active management of the fund is crucial. In addition, we appreciate the Emerging Stars Fund’s aim of influencing the investee companies to improve their ESG profile,” says Ojainmaa.
Varma has invested in sustainable funds before. In 2019, Varma developed, in collaboration with other parties, two sustainable exchange-traded funds (ETF), and invested a total of EUR 700 million in them. The ETFs were created jointly with the asset management company Legal & General Investment Management (LGIM) and the index investment company Foxberry, and they were listed on the London Stock Exchange.
Varma Mutual Pension Insurance Company is a responsible and solvent investor. The company is responsible for the statutory earnings-related pension cover of some 900,000 people in the private sector. Varma’s premiums written totalled EUR 5.3 billion in 2019 and pension payments stood at EUR 5.9 billion. Varma’s investment portfolio amounted to EUR 46.8 billion at the end of September 2020.
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