Ilmarinen strengthens its collaboration with international investors to slow down climate change – joined IIGCC
Ilmarinen increases its collaboration with other institutional investors. It has joined IIGCC – Institutional Investors Group on Climate Change. By joining forces internationally, institutional investors can make real changes happen to slow down the climate change.
Being a member, Ilmarinen is part of co-creating and sharing practices that will enable to reach the net zero targets. Already a year ago, Ilmarinen set a new ambitious target: to achieve a carbon-neutral investment portfolio by the end of 2035.
– We are currently enhancing our strategies and building our road map to reach our goal. As nobody has yet figured out how to decarbonize all the asset classes, it makes a lot of sense to work with others. Setting a target is one thing, but making the changes actually happen across all asset classes is another thing, says Karoliina Lindroos, Head of Responsible Investment at Ilmarinen.
Need for transparent, reliable and consistent data
Not having enough reliable and consistent climate-related data across asset classes is one significant bottleneck for investors at the moment.
– It would be important that the investors have a shared opinion regarding the data. What data to include, how should it be measured and what is the logic behind. We are hoping to include solid and reliable forward-looking climate data to our decision-making process for our investments, Lindroos says.
Institutional investors want to lead the change
IIGCC was set up almost 20 years ago with the aim of joining investors’ forces to slow down the climate change. Having currently more than 300 members in 22 countries, the organization aims to shift capital’s focus to low carbon activities and companies. The members mainly represent institutional investors and asset managers.
– Previously climate change was only a niche issue for investors. Now it has become the major concern for all, as it represents a potential global catastrophe. Investors have changed their mindsets from protecting risks to leading the way to green economy. For example, our Paris Aligned Investment Initiative has gathered more than 110 investors together. Sharing best practices and developing the tools investors need to take action is crucial, describes Daisy Streatfeild, Investor Practices Program Director at IIGCC.
Lindroos adds that having the climate change issues on the agenda also provides opportunities for institutional investors: how to pick those companies that have the best chances, best innovative products and services that are suited to the future low-carbon economy.
– I hope that we at Ilmarinen can be at the forefront in creating examples, how to decarbonize across asset classes. For us, responsibility is not just one corner of our portfolio. Rather it is a mindset that guides all our investment decisions. However, although we are ambitious, we are also humble when dealing with these new issues.
Streatfeild stresses that when over 300 investors join forces to fight climate change and start reallocating their assets accordingly, the impacts will be huge. This will force companies to act.
- IIGCC: IIGCC – The Institutional Investors Group on Climate Change
- Ilmarinen’s Annual and Sustainability Report 2020: Annual and Sustainability Report 2020 published - Ilmarinen
- The importance of data analysis: Master your ESG data - IlmarinenMaster your ESG data - Ilmarinen
Asset diversification and zero interest rates
Diversification across asset classes and geographically is mandatory from both risk management’s and returns’ perspectives. Traditional diversification has faced new challenges in the zero interest rate macro environment over the last years. Financial stability regulation also has a profound effect on high-return diversification possibilities in Finland’s pension system.
The death of responsible investing – why externalities redefine traditional investing
‘Today’s externalities are tomorrow’s risks that then become day-after-tomorrow’s losses’ - Pavan Sukhdev, President of WWF International
Specialist of the Month: Gerald Esono
At Ilmarinen, we take care of the pension security of more than a million Finns. For almost 60 years we have worked together with employers to create a better working life and promote work ability. But who are the people doing this work? Read on to see what our Specialist of the Month Gerald Esono has to say about his work.
- Work ability
- Success stories
- Working life
- Real estate
- Financial performance
- Corporate responsibility
- Customer story
- Pension reform
- Private customer