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).

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.

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.

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.