Finnish Pension Giant Awards Nordea Sustainable Mandate

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Stockholm (NordSIP) – Following the outperformance of sustainable strategies in 2020, many predicted that 2021 would be a strong year for ESG investing. Now, Nordea Asset Management appears to be at the front of the line to benefit from this trend.

Nordea’s Emerging Stars Equity Fund received a US$240 million investment from one of the Nordic region’s largest pension funds. The fund, which invests globally in emerging markets and focuses on corporate social responsibility (CSR) and environmental issues, won the mandate from Varma Pension Insurance Company.

“Varma has an investment portfolio valued at €47 billion, 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,” says Timo Sallinen, Head of Listed Securities at Varma.

According to Kaisa Ojainmaa, Senior Portfolio Manager at Varma, the fund’s low carbon intensity and alignment with the UN’s Sustainable Development Goals specifically address Varma’s climate-related and sustainable investment goals. ESG integration is also important in emerging markets, where Varma’s listed equity investments are valued at approximately €2 billion.

“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,” says Ojainmaa.

This is Varma’s third collaboration to develop sustainable investment solutions. In 2019, it developed, it partnered with Legal & General Investment Management (LGIM) and with index investment company Foxberry, to invest a total of €700 million in two sustainable exchange-traded funds (ETF)

Varma Mutual Pension Insurance Company manages the pension of approximately 900,000 people in the private sector. At the end of the third quarter of 2020, its investment portfolio was worth €46.8 billion.

Image © Shutterstock

 

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