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Coal, Oil-Funding Brokers to be Excluded by Varma

Finland-based Varma Pension Insurance Company will be excluding intermediaries funding fossil-based energy. The asset owner is now monitoring banks acting as its investment brokers, tracking how much banks are receiving in commissions for financing fossil-based fuel production, and how it compares to financing given to other companies. Through close monitoring and possibly negative screening, Varma aims to persuade banks to stop financing unsustainable sources of energy. “Companies that significantly fund fossil fuel production will be placed on an observation list,” said Vesa Syrjäläinen, Development Manager of Responsible Investment at Varma. “Varma’s Portfolio manager is responsible for informing our intermediaries about our climate policy, and if a blacklisted company does not change its ways, we will no longer trade with that party. Our goal is to make it more difficult to obtain financing for coal-based power. If other investors were to do the same on a grand scale, banks would be under pressure to change their ways.” This follows Varma’s commitment in June to no longer invest in companies with coal-based operations accounting for more than 10% of their revenue. It has further committed to reduce its investment portfolio’s absolute emissions by 25% by 25 and 50% by 2030 compared to 2021 levels. Hanna Kaskela, Varma’s Sustainability Director, said: “Criticism has come out of [COP27] that countries around the world are still pumping more money into fossil energy than combating the climate crisis. By curbing the financing of coal power, we aim to increase the attractiveness of climate-friendly forms of energy, such as wind and solar power, compared to fossil-based energy. 

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