Ilmarinen is planning to establish specific criteria for investments with higher biodiversity exposure, as well as screening portfolio companies on biodiversity-related issues, and –potentially – excluding activities that are particularly harmful to nature.
The Finnish pension insurer made the announcement in its biodiversity roadmap for 2025. Published on Friday, the report follows the model of Ilmarinen’s Climate Road Map, which came out last year and outlines the firm’s pathway to net-zero by 2035.
In the biodiversity roadmap, Ilmarinen said it will aim to screen portfolio companies on biodiversity-related issues, as part of wider work on enhanced due diligence.
Karoliina Lindroos, head of responsible investment, said these could include environmental controversies or exposure to controversial business activities, such as Arctic drilling.
She told Responsible Investor: “We will know more as we study further the data points that could be applied here.”
When it comes to making biodiversity-specific criteria for investments with higher biodiversity exposure, Lindroos suggested that externally verified certifications could be required in nature-based product supply chains involving commodities such as timber, rubber and palm oil.
She added that this would likely also apply to investments in materials production, which Ilmarinen has identified as having the highest risks to and impacts on biodiversity in its portfolio.
“Of course we need to study this further so nothing is definite yet as all these measures are under research in 2023-2024.”
Active ownership was also a key component of the roadmap, with already ongoing engagement and voting on biodiversity. There is also a possibility Ilmarinen will exclude economic activities.
Lindroos noted that the pension insurer is not at the stage of suggesting which industries could be first to face the chop.
“We would be in better position to answer after some years of advancing the road established by the roadmap and prefer not to speculate at this point. In general, our exclusion list is fairly short. Not the first tool in our toolbox in any theme.”