Varma Mutual Pension Insurance Company
Climate Impact & Sustainability Data (2019)
Reporting Period: 2019
Environmental Metrics
Waste Generated:2,804 tons/year (business premises)
ESG Focus Areas
- Responsibility for pension assets
- Responsibility for customers
- Responsibility for Varma employees
- Responsibility for the environment
- Ethics and transparency
Environmental Achievements
- Reduced the carbon footprint of real estate investments by 27% from 2015 levels.
- Reduced the carbon footprint of own operations by 44% from 2015 baseline.
- Achieved BREEAM In-Use environmental certification for eleven buildings, bringing the total to 48 certified properties (39% of the direct ownership real estate base).
Social Achievements
- Pension applications processed 10 days faster than the sector average.
- Best personal customer service in pension matters in Finland (Bisnode’s Voice of the Customer survey).
- 77% of rehabilitation customers returned to work.
- PeoplePower Index rose to an all-time high of 75.2 (AA rating), reflecting high employee satisfaction and engagement.
Governance Achievements
- Included in the PRI Leaders’ Group for responsible investment work.
- Updated climate targets with a goal of carbon-neutral investment portfolio by 2035.
- Renewed strategy based on securing pensions and responsibility for customers.
Climate Goals & Targets
Long-term Goals:
- Carbon-neutral investment portfolio by 2035.
Medium-term Goals:
- Achieve carbon-neutral investment portfolio by 2035.
- Reduce carbon intensity of listed equity and corporate bond investments by 40% by 2025 and 50% by 2027.
- Exit from thermal coal investments by 2025.
- Exclude oil exploration from investments by 2030.
- Raise share of low-carbon index funds to 35% by 2025.
- Increase share of renewable energy in electricity generation investments to 50% by 2030 (private equity).
Short-term Goals:
- Reduce properties’ energy consumption by 4% by the end of 2020.
- Reduce carbon intensity of listed equity and corporate bond investments by 30% by 2023.
Environmental Challenges
- Low interest rates.
- Materialisation of financial risks related to climate change.
- Increasing regulation of institutional investors.
- Structural transformation of working life and companies.
- Competition in the earnings-related pension sector.
- The Incomes Register initially presented challenges like incomplete earnings information and increased customer service calls.
Mitigation Strategies
- Strong solvency capital acts as a risk buffer.
- Successful diversification of investments.
- Use of digitalisation and data to develop disability risk management services.
- Updated operating model with modern pension insurance services.
- Increased focus on disability risk management in accordance with FIN-FSA guidelines.
Supply Chain Management
Responsible Procurement
- Supplier Code of Conduct (approved by Board of Directors), covering good business practices, human rights, occupational safety and health, and environmental respect.
Climate-Related Risks & Opportunities
Physical Risks
- Extreme weather conditions and natural disasters (acute and chronic risks)
- Sea floods (real estate)
Transition Risks
- Regulatory impact (emission rights prices, carbon tax)
- Consumer behaviour changes
- Market shifts
Opportunities
- Development of energy-efficient products and services
- Investments in companies benefiting from climate change mitigation
Reporting Standards
Frameworks Used: GRI Standards: Core option, TCFD framework
Certifications: BREEAM In-Use, Green Office
Awards & Recognition
- Ranked number one in the Climate Change category of Finsif’s sustainability reporting competition.