Finnish pensions giant Varma announced this morning it has become the third pensions firm in the world to have its climate goals officially validated by the Science Based Targets initiative (SBTi).

Danish labour-market pension funds PensionDanmark and AkademikerPension have also said in recent days they are among the few pension companies to have received the seal of approval from SBTi, whose guidance for the financial sector guidance is relatively new, having not been completed before 2022 – according to AkademikerPension.

“Varma is the first Finnish pension insurance company and the third pension company in the world to have its science-based targets validated,” the €57.4bn mutual pensions insurance company said.

Hanna Kaskela, senior vice president of sustainability and communications at Varma, said: “It is very important to us that our climate targets are based on science.

“The climate is warming at an alarming rate, and emissions must be reduced immediately if we want to stop global warming,” she said, adding that the Helsinki-based investor wanted to be sure its targets were aligned with international climate agreements.

Hanna Kaskela at Varma

Hanna Kaskela at Varma

Companies that are part of the SBTi – a joint initiative of the Carbon Disclosure Project, the UN Global Compact, the World Resources Institute and the World Wide Fund for Nature – set their own short and long-term targets, which must be validated by the SBTi.

Varma said its targets that had now been validated were short-term goals, and that it was also committed to setting long-term targets.

A spokeswoman for Varma told IPE the pensions insurance company saw PensionDanmark and AkademikerPension as being the first two pensions firms to have received SBTi validation.

At the SBTi, a spokeswoman said: “Financial institutions (FIs) have been able to set science-based targets and have them validated by the SBTi since 2020.”

“We now have around more than 70 FIs with validated near-term targets in line with 1.5°C,” she said.

Alongside PensionDanmark, AkademikerPension and Varma, Norwegian financial services firm and pension provider Storebrand also appears on the target dashboard on the SBTi website as having a validated near-term 1.5°C target.

On Wednesday, AkademikerPension said that as one of only two pension firms in the world, a number of its new climate targets had been approved by the SBTi.

“We want to do our utmost for the green transition, to take care of the climate and our members’ pension savings, and this validation of our new climate goals confirms that we are on the right track,” said the pension fund’s chief investment officer Anders Schelde.

Anders Schelde at AkademikerPension

Anders Schelde at AkademikerPension

A day earlier, PensionDanmark announced – also as one of the first pension companies in the world – that it now had an SBTi-validated target for CO2 emissions in several asset classes, and was the only one to have approved targets for investments in both properties and infrastructure up to 2030.

Jan Kæraa Rasmussen, head of ESG and sustainability at PensionDanmark, said the validation was an important test of its work to reduce and, in the long term, completely neutralise the climate footprint from DKK300bn (€40.2bn) of its members savings.

“The validation shows that we are on the right track, but we are not there yet. We must continue to follow up on the ambitious goals – also after 2030, so that we can reach the end goal of a CO2-neutral portfolio before 2050,” he said.

The SBTi recently said it was separating out its validation services division in order ”to further boost credibility and integrity for businesses and financial institutions setting science-based targets”.

By creating a separate entity for target validation services, the organisation said on 13 September that it was adopting the recognised best practice for assurance bodies, which was designed to safeguard impartiality.

”There are also plans to increase validation capacity to meet the growing international demand for science-based targets, which last year saw an 87% year on year increase in the number of companies setting targets,” the organisation said.

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