Denmark’s AkademikerPension and Finland’s Varma have become one of only three pension funds in the world to have their climate targets approved by the Science Based Targets initiative (SBTi).

SBTi is a partnership between the climate data NGO Carbon Disclosure Project, CDP, the UN's Global Compact, the World Resources Institute and the World Wide Fund for Nature, WWF. SBTi validates and approves companies' climate goals if, based on a scientific method, they meet the Paris Agreement's goal of limiting the global temperature rise to 1.5 degrees.

PensionDanmark has also revealed that it is the other pension company to have had its climate targets approved by the SBTi.

Commenting on the approval, Akademiker Pension investment director, Anders Schelde, said "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.”

Specifically, Akademiker Pension has been approved for a number of climate targets that complement its existing targets of increasing the proportion of green investments to an expected DKK 50bn in 2030 and reducing the financed CO2 emissions from the companies in which it invests in by 26.8 per cent in 2025 across all asset classes – climate goals that it has set as part of the participation in the UN-supported Net-Zero Asset Owner Alliance.

"The goals really show how extremely fast the green transition has to go. There should be no doubt that it will be a huge challenge both for us and for society to reach the goal on time. But conversely, the risk of not doing so is simply unacceptably high, so we will do our part to drive the change forward both in our own house, as a property investor and in the dialogue with our portfolio companies,” Schelde added.

To be approved by the SBTi, companies must both reduce CO2 emissions from their own operations and energy supply (scope 1+2) and ensure reductions in the entire value chain including sub-suppliers and customers (scope 3). For pension funds, scope 3 also includes our share of the emissions that the companies in which we invest emit.

Furthermore, Varma director responsible for responsibility and communication, Hanna Kaskela, said: “It is very important to us that our climate goals are based on scientific knowledge. The climate is warming menacingly but limiting warming to 1.5 degrees compared to pre-industrial times is still possible, although the critical time window is very close to closing. We want to be sure that our goals are in line with international climate agreements.”

Varma's SBTi goal is to reduce greenhouse gas emissions related to its own operations (Scope 1 and 2) by 60 per cent by 2030 compared to the 2021 level. The emissions of Varma's own operations come from the use of company cars and the carbon dioxide emissions of the real estate portfolio, which are caused by the consumption of electricity and heat purchased by Varma in our rental properties in apartment buildings and offices. Varma is a major real estate investor in Finland.

Regarding indirect greenhouse gas emissions (Scope 3), the target has been set for Varma's investment targets in listed shares, listed fixed-income investments and real estate funds. In these asset classes, Varma's goal is to increase the share of companies committed to SBTi to 51 per cent by 2027. In 2021, a total of 28 per cent of the investment targets had set their own SBT goals.

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