21 November 2022
Varma Pension Insurance Company is starting to monitor more closely the amount of financing that banks acting as its investment brokers provide to companies that rely on coal and oil in their operations. Through monitoring and possibly negative screening, Varma’s objective is to persuade banks to stop financing polluting forms of energy.
Brokers are international banks that manage purchases and sales related to Varma’s investments, for instance stock trading, based on orders.
“Criticism has come out of the United Nations Climate Change Conference, currently taking place in Egypt, that countries around the world are still pumping more money into fossil energy than combating the climate crisis. By curbing the financing of coal power, we aim to increase the attractiveness of climate-friendly forms of energy, such as wind and solar power, compared to fossil-based energy,” says Varma’s Sustainability Director, Hanna Kaskela.
Varma’s intention is that, as a result of this engagement, banks will be more reluctant to grant loans to coal-reliant companies or help them strengthen their financing with new bonds.
“This new means of engagement is aligned with our Sustainability Programme, and with our climate targets, which were updated in June. We have outlined that in addition to our own climate targets, we will start demanding more ambitious climate actions from our co-operation partners. We are also developing our value chain, meaning we will require sustainability from the partners we buy services from,” says Kaskela.Source: Varma
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