Varma is a seed investor in BlackRock’sParis Aligned corporate bond ETF

“Varma aims to have a carbon-neutral portfolio by 2035, and this investment is in line with our continued efforts to achieve this key sustainability target. The combination of both meeting Paris Aligned Benchmark regulatory standards and ESG integration make the ETF very interesting for our credit portfolio,” says Ann Brännback, Senior Portfolio Manager at Varma.

According to Brännback, Varma welcomes and wants to support the development and launch of exchange-traded funds that help investors align their portfolios with the objectives of the Paris Agreement – the international agreement to limit global warming to 1.5°C above pre-industrial levels. The fund is BlackRock’s first fixed income Paris Aligned Benchmark ETF.

The weight of issuers that meet carbon-reduction targets is increased in the fund

The fund invests in euro-dominated corporate bonds and tracks a newly designed Bloomberg MSCI index. The ETF achieves a 50% decarbonisation of absolute GHG emissions and carbon intensity relative to the standard index, followed by an annual 10% decarbonisation trajectory for both measures.

In addition to increasing the weight of issuers that meet carbon-reduction targets, the ETF's overall ESG profile is also improved when screens are applied to remove exposure to businesses involved in activities such as oil and gas, thermal coal, controversial weapons, tobacco and high-carbon electricity generation, as well as social norm violators and the lowest-rated ESG issuers.

According to Brännback, the fund is well aligned with Varma’s principles for responsible investment and soon-to-be-launched renewed climate goals for investments.

Varma Mutual Pension Insurance Company is a responsible and solvent investor of pension funds. The company is responsible for the statutory earnings-related pension cover of some 909,000 people in the private sector. Premiums written totalled EUR 5.6 billion in 2021 and pension payments stood at EUR 6.2 billion. The company’s investment portfolio amounted to EUR 57.6 billion at the end of March 2022.

BlackRock is a global asset management firm and the largest asset manager in the world. The company manages approximately USD 9.6 trillionin assets on behalf of investors worldwide.

Media contacts

Ann Brännback, Senior Portfolio Manager, Varma, tel. +358 40 736 0384, ann.brannback(at)varma.fi

Suvi Vesterinen, Communications Manager, Varma, tel. +358 40 555 8029, suvi.p.vesterinen(at)varma.fi