The annual carbon footprint of Mandatum’s investments totalled 994,636 (1,357,008) CO2e tonnes, showing a significant drop compared to the previous year (–27%) regardless of the increase in the assets under management.
“The carbon footprint of our equity investments, measured by financed emissions*, was as much as 51 per cent below the level of market indices We are very pleased to see that our long-term efforts are bearing fruit. Measuring the carbon footprint is essential for us to be able to fully monitor and understand the risks affecting our investments. We look into the carbon footprint of our investments not only in absolute terms but also with respect to the market in general, which is a concrete way to benchmark our progress,” says Senior Portfolio Manager Topias Kukkasniemi from Mandatum Asset Management.
Taking climate change into account and efficiently managing climate risk is one of the focal points of Mandatum’s investment activities.
“Climate change is shaping the investment markets. If climate risk is increasingly priced in by the markets going forward, it will have an impact on the value of investments. Therefore, preparing for the impacts of climate change is a way for investors to practice sensible risk management and seek a better return–risk ratio,” Kukkasniemi says.
The reduction in the financed emissions can largely be explained by active portfolio management measures. In full-mandate customer portfolios, for example, the proportion of fossil energy was reduced during the year. In practice, every portfolio manager sees to the efficient management of climate risk in the investment baskets or funds within their area of responsibility.
As a member of the Portfolio Decarbonization Coalition investor network, Mandatum’s objective is to minimise investments’ emissions by actively managing the climate risks of investment activities and offering opportunities to invest in companies with a smaller carbon footprint. Through the UN’s Montréal Pledge, Mandatum annually publishes the results of its investment emissions measurement.
Results in brief:
- The carbon footprint of investments, measured by financed emissions*, was 200 tCO2e/MEUR in 2020 (307 in 2019). Overall, it was 44 per cent below the general market indices. Equity investments were –51% and fixed income investments –41% in relation to the market indices.
- The average carbon intensity of investments was 138 tCO2e/MEUR (196 in 2019).
How the measurement was carried out:
- The measurement covered the investment assets managed by Mandatum within the company’s own investment baskets, full-mandate wealth management and allocation investment baskets, as per the situation on 31 December 2020.
- Measurements have been carried out by Mandatum since 2017.
- The measurement was carried out by ISS ESG.
- The carbon footprint of the investees is based on the Carbon Disclosure Project’s (CDP) data on the emissions of the companies. Where no data is available, the emissions have been estimated using ISS ESG’s sector-specific models.