Ilmarinen Mutual Pension Insurance Co., Helsinki, switched €580 million ($623 million) to a new European climate ETF run by Amundi, said Juha Venalainen, senior portfolio manager.
The pension fund is the anchor investor in the Amundi MSCI Europe Climate Action UCITS ETF. The assets were transferred from another ETF, also run by Amundi. Ilmarinen now has about 95% of its €5 billion passive exposure invested through ETFs that focus on climate factors.
The ETF utilizes a new MSCI Climate Action index methodology, which was developed last year, Mr. Venalainen said in an interview. Ilmarinen sought a new index that would reflect the risks associated with climate change that were not apparent a few years ago, he added.
Companies in each sector are ranked by MSCI using climate indicators such as current emissions, rate of emission reduction, whether the businesses are focused on climate opportunities and climate risk management. Companies in the top half of the ranking are included in the index.
"The expansion of emissions trading and tightening of climate regulation increase companies' cost pressures but also offer new markets for innovative products," Mr. Venalainen added in a news release Wednesday.
"The Amundi MSCI Europe Climate Action UCITS ETF investment will achieve a Europe exposure in Ilmarinen's passive equity portfolio to companies which we believe have a chance of performing better than their competitors when the business environment changes due to climate warming," he added in the release.
Ilmarinen has €57.5 billion in assets.
