Finland’s Ilmarinen invests €2.75bn in climate-focused ETFs

Written by Jack Gray

14/06/2023

Finnish pension insurance company, Ilmarinen, has announced that it is an anchor investor in new climate-focused iShares exchange-traded funds (ETFs), launched by BlackRock, in the USA and Japan.

Ilmarinen invested €2bn in the US fund and €745m in the Japanese fund, in what it stated were a continuation of its climate-oriented investment policy.

It also recently invested around €1.86bn in the climate-focused equity ETF, Xtrackers MSCI USA Climate Action Equity ETF.

The new iShares ETFs track the MSCI Climate Action indexes, and Ilmarinen has contributed to the development of the indexes, which select the top half of companies in each sector based on an assessment of climate considerations.

These considerations include current emissions intensity, emissions reduction targets, green business revenue and climate risk management.

Ilmarinen noted that it will continue to increase the climate emphasis of its ETF investments, with the share of its passive equity investments that are climate-focused being more than 85%.

“The investments may reduce the sensitivity of the passive stock portfolio to the risks resulting from climate change,” commented Ilmarinen senior portfolio manager, Juha Venäläinen.

“The business environment will change globally over the next few years and decades due to climate change.

“We believe that companies that reduce the climate impact of their operations or try to benefit more fully than their competitors from the opportunities resulting from the fight against climate change are better investments for long-term investors compared to their peer group.”

Ilmarinen head of responsible investment and sustainability, Karoliina Lindroos, added: “Ilmarinen’s goal is to achieve a carbon-neutral investment portfolio by the end of 2035.

“Climate change risks and opportunities can also be accounted for in index investments. These investments are part of our actions to promote our climate goals.”

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