Varma, Helsinki, invested €300 million ($327 million) in a Japan-focused exchange-traded fund managed by Nomura Asset Management.
The pension insurance company, which has €59 billion in assets, invested in NEXT FUNDS Solactive Japan ESG Core Index ETF, it said in a news release Wednesday. The fund's index was customized to Varma's preferences by Solactive, the index provider.
The low-emission ETF was listed on the Tokyo Stock Exchange on April 8 and is the largest responsible investment ETF to be listed in Japan, Varma said.
"We wanted to make an ESG investment that takes sustainability aspects into account also in the Japanese market," said Timo Sallinen, head of listed securities, in the news release. "This is a systematic continuation of our ESG investments tailored to the U.S., European and emerging markets. The number of exchange-traded ESG funds in Japan is still rather low."
The ETF invests in about 100 large- and midsize companies in Japan, including conglomerate Hitachi, automotive firm Toyota and video game company Nintendo.
"The investees selected for the fund are low-emission industries whose growth prospects we believe in also in the long run," Mr. Sallinen said. "In addition, within each industry, the companies that operate the most responsibly were selected. One example of an industry whose future prospects we believe in is technology."
The ETF complements the fund's existing allocation to Japanese equities, Mr. Sallinen said in emailed comments. The size of that exposure varies depending on executives' views.
"The assets for this investment were released from European stocks," Mr. Sallinen added.
