Varma Anchors Largest ETF Launch

    Stockholm (NordSIP) –  Varma, a Finnish pension insurance company, announced the investment of €200 million in BlackRock’s U.S. Carbon Transition Readiness Exchange-Traded Fund (ETF) to support companies lowering their CO2 emissions and reduce the footprint of its own investments. In addition, the ETF underweights companies that are poorly positioned to benefit from the transition. The criteria for assessing and scoring transition readiness are fossil fuels, clean technology, energy management, waste management and water management.

    The ETF listed on the New York Stock Exchange on April 8th for €1 billion, making it the largest ETF launch ever. It invests in large- and mid-capitalization US companies positioned to benefit from the transition to a low-carbon economy and tracks the Russell 1000 index. Although other significant global investors will invest in the fund, Varma is thus far the only Nordic anchor of the ETF.

    “We are very proud to be able to promote sustainable investment together with BlackRock and other major global investors. This, in effect, allows us to show our support for companies that aim to lower their carbon emissions,” says Timo Sallinen, Varma’s Head of Listed Securities. “In addition, Varma’s goal is to reduce the carbon footprint of its own investments and achieve a carbon-neutral investment portfolio by 2035. Investing in BlackRock’s ETF is one way of reducing the carbon footprint of Varma’s investments,” says Sallinen.

    “The energy transition presents a great investment opportunity and we are committed to continue innovating to bring new solutions forward that help position our clients at the forefront of this shift to a lower carbon economy,” says Wilhelm Schauman, Head of iShares Institutional Sales in the Nordic Region for BlackRock.

    “The fund invests in companies that demonstrate action or policies for transitioning to low-carbon operations. The scoring is used to weight companies whose business operations are more transition ready,” explains Sallinen.

    Image by Oimheidi from Pixabay

    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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