Ilmarinen Invests in Emerging Market ESG ETF

    Stockholm (NordSIP) – On February 12th, BlackRock announced that Ilmarinen, Finland’s largest pension insurance company, had invested US$600 million in the iShares ESG MSCI EM Leaders ETF (LDEM).

    Founded in 1961, Ilmarinen is responsible for providing pension insurance for 1.2 million people and has approximately €50 billion in ESG-integrated assets. According to BlackRock, this marks the second time Ilmarinen has reallocated assets toward iShares ESG-integrated strategies from traditional benchmarks.

    BlackRock took a much-awaited leap into sustainable investments this year when it announced it would “place sustainability at the centre of our investment approach”, becoming a signatory of Climate Action 100+ at the start of 2020.

    “ESG has been a core component of our investment strategy for a long time. Until recently, however, implementing sustainable strategies in our indexed public equity portfolio has been difficult because many parts of the market lacked a suitable ESG-oriented benchmark,” said Anna Hyrske, head of responsible investing at Ilmarinen. “Advances in ESG data and analysis, indexing and portfolio construction have helped us achieve our sustainability goals and meet our performance objectives.”

    LDEM tracks an index composed of more than 400 emerging market large- and mid-cap high ESG performing companies relative to their sector peers in 26 countries. The index excludes companies involved in tobacco, alcohol, gambling, nuclear power, nuclear and conventional weapons, and controversial weapons as well as other controversial business involvement.

    “Ilmarinen is pioneering an approach to re-orienting its entire portfolio toward more sustainable solutions,” said Salim Ramji, Global Head of iShares and Index Investing a BlackRock. “More and more clients globally have conviction about the impact of sustainability risks on their portfolios and are integrating ESG into their investment allocation decisions as a result.”

    Ilmarinen previously invested nearly US$850 million in the iShares ESG MSCI USA Leaders ETF (SUSL), which launched in May 2019. According to BlackRock, SUSL had the most extensive equity ETF launch in the past 15 years and has subsequently attracted another US$1 billion in investor flows, more than doubling the fund to $1.9 billion in assets.

    “Assessing a portfolio’s environmental, social and governance characteristics through a risk lens is becoming standard for many investors,” said Carolyn Weinberg, Managing Director and Global Head of Product for iShares. “With over US$26 billion in assets invested in more than 80 ETFs globally, iShares is continually innovating to expand our range of ESG index strategies to help meet our clients’ investment objectives, from implementing screens to targeting high ESG-rated companies.”

    Image © Ilmarinen

    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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