Varma exits coal and oil investments

Written by Adam Cadle

26/02/2021

Varma has dramatically cut the share of fossil fuels in its investments in order to achieve a carbon-neutral investment portfolio by 2035.

As part of its climate goals, Varma is committed to exiting from investments in thermal coal by 2025 and excluding oil exploration by 2030. Varma reached the final stretch of its goal to exit fossil investments already in 2020, as there were only a handful of such investments remaining. At the end of 2020, there were no coal mining companies in Varma’s portfolio.

Besides coal producers, oil exploration and electricity producers whose operations rely on coal were also excluded. At the end of 2020, the shares of oil exploration companies only accounted for 0.5% of Varma’s direct equity investments and exchange-traded funds (ETF). Of equities and ETFs, 1.6% was invested in companies that rely on coal for more than 5% of their operations.

Varma’s goal is to accelerate the phasing out of coal power plants such that the coal plants of companies in Varma’s portfolio are decommissioned by 2030 at the latest.

“Otherwise, we will exit the investment. We see no future for coal-based electricity generation,” Varma’s director of responsible investment, Hanna Kaskela, said.

“Mitigating climate change requires us investors to operate in a way that leads to a reduction in the use of fossil fuels. We don’t want to support the kind of business that puts the survival of future generations at risk."

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