Finnish state-owned development financier Finnfund said its new strategy up to 2025 includes the aim of maintaining the net-negative emissions status of its now €780m investment portfolio.
The fund reported that its portfolio had become carbon net-negative – meaning it absorbs more carbon dioxide than it emits – last spring.
Releasing the fund’s 2021 annual report, Jaakko Kangasniemi, chief executive officer of Finnfund, said the institution had taken significant steps in its impact and sustainability work during the year.
“In spring 2021, we reported a carbon net negative investment portfolio – probably as the first development financier in the world. In our new strategy we also commit to keep it that way,” he said.
Apart from aiming to maintain a net-negative emissions portfolio, the other two key strategic objectives Finnfund set in December 2021 for 2025 are to double the total impact of the fund and for 50% of investments to involve private capital by 2030.
At the end of 2021, 19% of Finnfund’s financing was from private capital markets.
In the most recent carbon accounting data – those for 2019, which were released in May 2021 – Finnfund’s investments removed 134,679 tCO2e more than they emitted.
The fund said these results stemmed from its long-term commitment to sustainable forestry investments.
“In 2019, Finnfund’s investments in forestry and agroforestry removed 240,431 tCO2eq from the atmosphere. More than three-quarters (83%) of these carbon sinks are in Africa,” it said in the annual report.
At the end of 2021, the institution had a total of around €1.12bn in investments, commitments, and investment decisions, half of which are located in Africa, it reported. The investment portfolio grew to €780m from €710m a year before, according to the report.
However, net profit for the year was negative, it said, to the tune of €20m, particularly due to the COVID-19 pandemic and conflicts in several countries, such as Ethiopia, Myanmar, and Ukraine.
Kangasniemi said that as a development financier, Finnfund’s mission was to be there where it was needed most. ”We were able to maintain our investment activity at a high level and exceeded our investment targets both in numbers and volume,” he said.
The previous year, 2020, Finnfund recorded a deeper loss of €26.3m after profits in each of the three years before that, according to the report.
Earlier this year, the fund announced it would open its first regional office in Africa this summer, with the base being set up in Nairobi, Kenya.