Ilmarinen as an anchor investor in European climate fund
Ilmarinen continues its investment strategy that has a strong focus on climate change by investing EUR 580 million in a new European equity fund which selects investees based on climate indicators.
“Europe has been a leader in mitigating climate change. The expansion of emissions trading and tightening of climate regulation increase companies’ cost pressures but also offer new markets for innovative products,” says earnings-related pension company Ilmarinen’s Senior Portfolio Manager Juha Venäläinen.
Companies that are able to adapt to the challenges resulting from climate change faster than their competitors can use their head start to increase their market share or improve their profitability in Europe, as well as the global markets.
“The Amundi MSCI Europe Climate Action UCITS ETF investment will achieve a Europe exposure in Ilmarinen’s passive equity portfolio to companies which we believe have a chance of performing better than their competitors when the business environment changes due to climate warming,” Venäläinen points out.
“We believe that for investors, these companies offer a more profitable investment in the long run than their competitors.”
More than 95 per cent of Ilmarinen’s passive equity portfolio tracks the climate index
The investment in the Amundi MSCI Europe Climate Action UCITS ETF continues Ilmarinen’s investment strategy that has a strong focus on climate change in which the company will shift from funds taking sustainability into account more generally to a focus on climate factors in fund investments. After the investment, more than 95 per cent of Ilmarinen’s passive equity portfolio (some EUR 5 billion) will track the indices built using the MSCI Climate Action methodology.
In the index methodology, the companies in each sector are rated using four climate indicators (current emissions, rate of emission reduction, business focused on climate opportunities and climate risk management). Following an extensive sustainability screening, the top half of companies from each sector by count is included in the index.
“The investment in the Amundi MSCI Europe Climate Action UCITS ETF also supports Ilmarinen’s goal of achieving a carbon neutral investment portfolio by the end of 2035. We consider the investment to be a significant step towards achieving this goal,” says Karoliina Lindroos, Head of Responsible Investment and Sustainability.
- Juha Venäläinen, Senior Portfolio Manager, +358 50 575 8618,firstname.lastname@example.org
- Karoliina Lindroos, Head of Responsible Investment and Sustainability, +358 40 577 2203, email@example.com
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Ilmarinen’s Interim Report 1 January to 30 June 2023: Return on investments rose to 3.7 per cent, solvency strengthened and cost-effectiveness continued to improve
The return on Ilmarinen’s investment portfolio was 3.7 (-6.2) per cent, i.e. EUR 2.1 billion. The market value of investments grew to EUR 58.2 (56.3) billion. The long-term average return on investments was 5.8 per cent as of 1997. This corresponds to an annual real return of 3.8 per cent.
Ilmarinen invests in new climate-focused exchange-traded funds
Ilmarinen is an anchor investor in new climate-focused iShares ETFs in the USA and Japan, launched by the US asset management company BlackRock Inc. (NYSE: BLK).