Stockholm (NordSIP) – A third of all Finnish companies and about 40% of self-employed people in Finland have entrusted their pensions, amounting to almost EUR 30 billion, to Elo Mutual Pension Insurance Company. Ensuring that their assets are managed in a sustainable manner is a clear priority for Anna Varpula, Elo’s newly appointed Director of Responsible Investment. Just a couple of weeks after joining the company, Varpula talks to NordSIP about what enticed her to take on this new position and what she hopes to achieve at Elo.
“Elo is a long-term pension investor, managing significant investment assets across various asset classes and different investment strategies,” says Varpula. “This allows us to incorporate sustainability from different aspects,” she adds. She seems genuinely excited to be able to employ the whole palette of ESG-related tools, metrics and analyses and learn even more as these are constantly developing.
After almost a decade in London, where she completed her MBA studies and worked for hedge fund Lentikia Capital (later part of BTG Pactual), nine years ago, Varpula returned home to Helsinki and later joined the State Pension Fund of Finland (VER). “That was where I first got introduced to responsible investing,” she recalls. “And I got so excited about the topic that I wanted to learn more,” she says. And so she went back to school, majoring in agricultural economics at Helsinki University. While completing her master’s degree, she also took courses in environmental economics and policies, economics, global political economy, finance, statistics, and mathematics, to name just a few. “I see responsible investing as an interdisciplinary subject. That’s why I wanted to study in a versatile manner,” she explains.
The newly appointed director of responsible investing is an optimist when it comes to the future of ESG. “I expect that climate change and other environmental issues will continue to be one of the major focus areas going forward,” she says. “It is very encouraging that so many investors have made Paris-aligned and net-zero commitments recently,” she adds. Elo, too, is one of the institutions joining the Paris-Aligned Investment Initiative Net-Zero Asset Owner Commitment. Varpula is highly aware of what this means in practice: committing to decarbonising the portfolios by 2050 or sooner, increasing investments in climate solutions, setting interim targets, and undertaking advocacy and engagement in line with the net-zero goals.
Right now, Varpula is following the discussions and the key outcomes of COP26 closely. “We’ve seen commitments and pledges so far,” she comments. “Let us hope that the good flow continues after COP26, and that we can see progress towards what was agreed in practice,” she adds.
Despite her busy environmental agenda, Varpula is mindful that ‘E’ is not the only letter in the sustainability alphabet. “We should not forget the other two letters,” she urges. “The global pandemic has shown a wide range of social issues that investors need to address as well,” she says.
“What I like about responsible, or sustainable, investing is that there is not just one ‘right’ approach to do it,” reflects Varpula. “There are multiple approaches to suit any investor’s individual style. And you can combine these approaches and use them simultaneously,” she adds.
As styles and approaches go, however, Varpula does seem to have a personal preference. “To me, active ownership and engagement, either via a dialogue with companies and asset managers or via different investor collaboration platforms and initiatives, are key,” she says. “I like the idea of enabling real-world impact,” concludes Varpula.