Alternative Investments/ESG: Giant Finnish Pension Fund Ilmarinen Invests Nearly $3B In Climate ETFs

Ilmarinen is an anchor investor in new climate-focused iShares ETFs in the US and Japan launched by BlackRock.

Ilmarinen Mutual Pension Insurance, the Finnish pensions insurer, has significantly increased its collaboration with ETFs by investing €2.75 billion (US$2.97 billion) in climate-focused exchange-traded funds. The move reflects the company’s commitment to aligning its passive equities exposure with its climate goals. Ilmarinen, which manages a pension fund worth €57.5bn and provides pensions through private-sector employers, has become the anchor investor in two new climate-focused iShares ETFs launched by BlackRock in the US and Japan.

The US fund received a €2 billion (US$ 2.16 billion) investment, while the Japanese fund received €745 million (US$805 million), both tracking the MSCI Climate Action indices. This investment is part of Ilmarinen’s ongoing climate-oriented investment policy, as the company aims to achieve a carbon-neutral investment portfolio by 2035. Notably, this ETF investment surpasses the previous record set by Ilmarinen in April. (IPE)

Ilmarinen emphasized that these investments would help mitigate the risks resulting from climate change and position the organization for the changing global business environment in the coming years. The fund believes that companies focusing on reducing their climate impact and capitalizing on climate change-related opportunities are more attractive long-term investments compared to their peers.

While the company has not set a specific target for climate-focused portfolio allocation, the recent ETF investment has raised the share of climate-focused investments within its passive equity assets to over 85%. Ilmarinen’s listed equity portfolio, valued at approximately €17bn, predominantly consists of passive products such as ETFs, accounting for about 29% of the total.

Most of the portfolio now aligns with the MSCI Climate Action index, a shift from the previous use of ESG benchmark indices for internally-managed equity investments.

Related Story:  DWS Xtrackers Launches $2B Climate Equity ETF Anchored By Finland Insurer

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