Finnish pension provider invests $240m in EM sustainable fund

On the 01/20/21 at 2:38PM


Adrien Paredes-Vanheule

Varma, a Finnish pension insurance company, has announced a $240m (€196m) investment in Nordea’s Emerging Stars Equity fund, a sustainable investment strategy investing in emerging markets.

The Nordic institutional investor said the investment supports Varma’s climate targets and contributes to the United Nations’s sustainable development goals. Varma had set a target of being net zero carbon by 2035. “Varma has an investment portfolio valued at €47bn, and sustainability is an integrated part of our investment process. We want to be an active, responsible investor globally, and we were looking for a product for the emerging markets. Nordea has a highly efficient process in responsible investments, and the fund has a solid track record. Thus, the fund is a good fit for our portfolio,” commented Timo Sallinen, head of listed securities at Varma.

The Finnish pension provider’s current listed equity investments in the emerging markets are valued at approximately €2bn. “ESG data is not yet as widely available in the emerging markets as it is in the developed markets. That is why we believe the active management of the fund is crucial. In addition, we appreciate the Emerging Stars fund’s aim of influencing the investee companies to improve their ESG profile,” added Varma's senior portfolio manager Kaisa Ojainmaa.

Varma had been active in the sustainable field in 2019 when it joined forces with Legal & General Investment Management and index company Foxberry to develop and launch two sustainable exchange-traded funds, in which it invested €700m.