Finnish pension Varma has invested €230m in State Street Global Advisors Sustainable Climate Corporate Bond funds.
The funds look to reduce investors’ carbon emissions and fossil fuel exposure and re-allocate capital to investments that contribute to climate change mitigation and adaptation. They invest in European and US corporate bonds and are aligned with the Paris Agreement. They will have 70% lower carbons emissions compared with the benchmark index, the Markit iBoxx Euro Sustainable Corporate Bond Custom index. Tobacco companies, companies producing controversial weapons and violating the UN’s principles concerning human rights and anti-corruption are excluded.
Petri Ala-Härkönen, director at Varma, says, “These index funds gave us the opportunity to increase our climate allocation also in corporate bond investments. The Sustainable Climate Corporate Bond Funds are well aligned with Varma’s climate-related targets. In terms of mitigating climate change, we aim for a carbon-neutral investment portfolio by 2035”.