Search our Signatories
Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors

Elo Mutual Pension Insurance Company

Target disclosure: October 2024

Portfolio level

Portfolio level – Portfolio decarbonisation reference target

Baseline date: 31 December 2019

Baseline performance:

  • Listed equity investments: 208t C02e/$mn turnover (WACI, scope 1+2)
  • Listed corporate bonds: 192t C02e/$mn turnover (WACI, scope 1+2)
  • Direct real estate investments: Commercial properties: Electricity 19.7 kWh/m3/a; District heat 24.5 kWh/m3/a
  • Residential properties: Electricity 4.2 kWh/m3/a; District heat 36.4 kWh/m3/a

Target year(s): 2025, 2027, 2030, 2050

Target(s):

  • Listed equity and corporate bonds: WACI -25% by 2025, -60% by 2030.
  • Direct real estate: The goal of direct Finnish real estate investments is carbon-neutral energy use by 2027. Elo has joined the Energy Efficiency Agreements for Commercial Properties and Rental Housing Properties (TETS and VAETS) and committed to reduce energy consumption by 7.5% (from 2017 level by 2025). We have set an additional target of reducing the nominal energy consumption of district heat by 10% and electricity by 5% (from 2019 levels by 2025).
  • Whole portfolio: Net zero by 2050 or sooner

GHG scopes included: Our carbon reduction targets for listed equity and corporate bond emissions cover scopes 1 and 2 at the moment. In addition, we also disclose and monitor scope 3 absolute emissions.

Asset classes in scope: Listed equity and corporate bond investments (2025, 2030), direct real estate investments (2025, 2027, 2030)

Net zero scenarios/methodology: Elo has been developing its climate strategy roadmap in line with the PAII Net Zero Investment Framework, IEA Net Zero by 2050 and IPCC’s 1.5°C pathways.

Emissions metrics: Due to the changes in our AUM and allocations, we have set the interim targets on an intensity basis (WACI).

However, we disclose and monitor listed equity and corporate bond emissions both in terms of intensity as well as absolute emissions. Our aim is to reduce emissions in both, and we will reassess the basis for our targets if necessary.

In real estate, we disclose and monitor energy consumption of direct domestic real estate (heating and electricity, MWh), carbon footprint of real estate (tCO2e), carbon footprint of real estate investments normalised by managed assets (tCO2e/MEUR) and emissions intensity (kgCO2e/m2).

Portfolio level – Investment in climate solutions target

Qualitative target

Baseline date: 31 December 2021

Baseline performance: In direct listed equity investments, sustainable solutions account for 11.4% (environmental 6.0% and social 5.4%) of companies’ revenues and for 11.7% (environmental 7.9% and social 3.9%) in direct listed corporate bonds in 2021.

The share of sustainable solutions based on the market value of infrastructure investment funds was 82%.

Target: Elo has set the target to increase investments in sustainable solutions, including climate solutions in infrastructure and direct listed equity and corporate bond investments. For direct listed equity and corporate bond investments, our objective is to double the investments in sustainable solutions by 2030 compared to the 2021 level. In Finnish direct real estate investments, we are actively exploring the possibilities of increasing our own energy production. Our goal is to use renewable energy produced on site in 30% of the sites by 2030.

Methodology: Sustainable solutions include products and services that help solve the world’s major environmental and social challenges. For listed equity and corporate bond investments we use MSCI Sustainable Impact methodology (% of revenue).

Asset level

Asset level – Portfolio coverage target

Baseline date: 31 December 2022

Baseline performance: In 2022, approximately 46% of Elo’s direct listed equity investments had a GHG emission reduction target confirmed by SBTi.

Target:

  • For direct listed equity investments, the target is for the majority to have a science-based target by 2030.
  • In direct real estate, our goal is that 15 of our commercial properties will be environmentally certified by 2030. The share corresponds to approximately 67% of the value of commercial property investments. We will also introduce the environmental certification for our own housing by 2025.

Work in progress: We are working on adding other criteria. For indirect investments, we have sent out questionnaire to all of our fund managers regarding SBTs, Paris alignment and other climate issues.

Asset classes in scope: Listed equity, direct real estate, other asset classes to be defined.

Data sources: SBTi, MSCI ESG Manager and Climate Action 100+ Benchmark, other datasets and sources.

Asset level – Engagement threshold target

Approach: Elo engages with companies and managers directly and via collective engagement.

We are currently supporting climate related collective engagement for example through IIGCC, CA100+, CDP (Non-disclosure Campaign, Science-Based Targets Campaign) and CLC (Climate Leadership Coalition).

As a rule, Elo attends the general meetings of all the companies in Finland in which it is a shareholder. For annual general meetings outside Finland, we have a sustainable proxy voting policy in place. Elo’s participation and voting on general meetings can be found on our website.

Additional information

Operational emissions: Elo is committed to reduce the GHG emissions of its own operations. Elo’s total GHG emissions in 2023 were 6,436 tCO2e (scope 1,2 and 3, excluding investments).

Fossil fuel investment: Elo excludes companies that derive more than 15%of their revenue from activities related to coal production or the use of coal in energy production, without a clear strategy for reducing the use of coal, or companies that are planning new coal-based investments, and energy companies that derive more than 5% of their revenue related to arctic oil or arctic gas production or oil sands extraction.

Elo’s climate policy 2023-2030, Elo’s principles of responsible investing and Elo’s ownership policy are available here.

Initial target disclosure: September 2022

Portfolio level

Portfolio level – Portfolio decarbonisation reference target

Baseline date: 31 December 2019

Baseline performance:

  • Listed equity investments: 208t C02e/$mn turnover (WACI, scope 1+2)
  • Listed corporate bonds: 192t C02e/$mn turnover (WACI, scope 1+2)
  • Direct real estate investments: Commercial properties: Electricity 19.7 kWh/m3/a; District heat 24.5 kWh/m3/a
  • Residential properties: Electricity 4.2 kWh/m3/a; District heat 36.4 kWh/m3/a

Target year(s): 2025, 2030, 2050

Target(s):

  • Listed equity and corporate bonds: WACI -25% by 2025, targets for 2030 to be determined by YE2022.
  • Direct real estate: Elo has joined the Energy Efficiency Agreements for Commercial Properties and Rental Housing Properties (TETS and VAETS) and committed to reduce energy consumption by 7.5% (from 2017 level by 2025). We have set an additional target of reducing the nominal energy consumption of district heat by 10% and electricity by 5% (from 2019 levels by 2025). We are currently setting targets to be net zero by 2030 or sooner.
  • Whole portfolio: Net zero by 2050 or sooner

GHG scopes included: Our carbon reduction targets for listed equity and corporate bond emissions cover scopes 1 and 2 at the moment. In addition, we also disclose and monitor scope 3 absolute emissions for upstream for all sectors.

Asset classes in scope: 2025, 2030: listed equity and corporate bond investments, direct real estate investments

Net zero scenarios/methodology: Elo has been developing its climate strategy roadmap in line with the PAII Net Zero Investment Framework, IEA Net Zero by 2050 and IPCC’s 1.5°C pathways.

Emissions metrics: Due to the changes in our AUM and allocations, we have set the interim targets on an intensity basis (WACI).

However, we disclose and monitor listed equity and corporate bond emissions both in terms of intensity as well as absolute emissions. Our aim is to reduce emissions in both, and we will reassess the basis for our targets if necessary.

In real estate, we disclose and monitor energy consumption of direct domestic real estate (heating and electricity, MWh), carbon footprint of real estate (tCO2e), carbon footprint of real estate investments normalised by managed assets (tCO2e/MEUR) and emissions intensity (kgCO2e/m2).

Portfolio level – Investment in climate solutions target

Qualitative target

Baseline date: 31 December 2021

Baseline performance: In direct listed equity investments, sustainable solutions account for 11.4% (environmental 6.0% and social 5.4%) of companies’ revenues and for 11.7% (environmental 7.9% and social 3.9%) in direct listed corporate bonds in 2021.

The share of sustainable solutions based on the market value of infrastructure investment funds was 82%.

Approximately 40% of Elo’s direct listed equity investments are taxonomy-eligible.

Target: Elo has set the target to increase investments in sustainable solutions, including climate solutions in in infrastructure and direct listed equity and corporate bond investments. In addition, we follow the taxonomy-eligibility, and – once available – taxonomy-alignment, of our investments. More information can be found on pages 36–38 in Elo’s annual and responsibility report 2021.

Methodology: Sustainable solutions include products and services that help solve the world’s major environmental and social challenges. For listed equity and corporate bond investments we use MSCI Sustainable Impact methodology. We are also monitoring the EU Taxonomy alignment criteria. We are constantly monitoring the development of the definitions and methodologies for sustainable solutions investments. The methodologies used are described on pages 36–38 and 70 in Elo’s annual and responsibility report 2021.

Asset level

Asset level – Portfolio coverage target

Baseline date: 31 December 2020, to be updated

Baseline performance: In 2020, 5% of companies in listed equity investment’s AUM had set an ambitious emissions reduction target such as an SBT. In general, 66% of companies in listed equity investment’s AUM had set an emissions reduction target. In 2021, these figures were 7% and 76% respectively.

Target: To be defined, YE2023

Work in progress: We are working on adding other criteria. For indirect investments, we have sent out questionnaire to all of our fund managers regarding SBTs, Paris alignment and other climate issues.

Asset classes in scope: Listed equity, other asset classes to be defined.

Data sources: SBTi, MSCI ESG Manager and Climate Action 100+ Benchmark, other datasets and sources to be defined.

Asset level – Engagement threshold target

Approach: Elo engages with companies and managers directly and via collective engagement.

We are currently supporting climate related collective engagement for example through IIGCC, CA100+, CDP (Non-disclosure Campaign, Science-Based Targets Campaign) and CLC (Climate Leadership Coalition).

Elo attends and participates in AGMs with a focus on the highest emitting companies in the portfolio. Voting activity is based on our ownership policy and climate strategy. In Finnish listed equities, our target is to attend the AGMs of all companies in our portfolio. Elo’s participation and voting on general meetings can be found on our website.

Additional information

Operational emissions: Elo is committed to reducing the environmental impact of its own operations by setting emissions reductions targets. Elo’s total carbon dioxide emissions in 2021 were 7,674 tCO2e (excluding investments). This includes scope 1, 2 and 3.

Fossil fuel investment: We are currently updating our climate strategy 2030 and Responsible Investment policies including a more detailed approach to fossil fuels. From our direct listed equity and corporate bond investments we already exclude companies deriving more than 25% of sales from coal production or power generation.

Additional information: We are currently in the middle of the process of updating our new climate strategy and targets for 2030 by YE2022. We are also updating our Principles of Responsible Investment along the process. There will be, for example, more detailed processes for non-listed asset classes, including real estate; updated engagement policy which already includes climate change and mitigation approaches; and a more detailed fossil-fuel policy.

Elo’s Climate Strategy 2020-2025, Elo’s annual and responsibility report 2021 and Elo’s ownership policy are available here.