Finnish earnings-related pension provider Ilmarinen has strengthened its climate ambitions after achieving all the emissions-reduction targets set for the 2021-2025 period.

The insurer said its new climate plan for 2026-2030 commits it to science-based targets and tighter emissions reductions, as it continues to manage climate risks and support the transition to a low-carbon economy to safeguard long-term pension asset values.

Under the renewed plan, Ilmarinen aims to reduce the carbon intensity of its direct listed equity and corporate bond investments by 35 per cent and absolute emissions by 25 per cent.

The carbon intensity of its real estate investments is targeted to fall by 44 per cent.

The insurer also plans to set formal science-based climate targets by the end of 2027 and has confirmed that its operational activities are included in its climate goals.

Ilmarinen investment director, Annika Ekman, said the firm’s statutory duty to invest pension assets productively and securely was "closely linked" to climate risk management.

“Climate risk management supports this goal. We also invest responsibly by taking into account the effects of climate change on the risk and return profile of our investment targets,” Ekman continued, adding that climate mitigation and adaptation also present opportunities to create new businesses and jobs.

Despite a challenging international political environment for sustainability, Ilmarinen resolved to continue its climate work with determination, emphasising the importance of action in the current decade.

Echoing this, head of responsible investment, Karoliina Lindroos, warned that climate change will increasingly affect company operations and profitability, including through more frequent extreme weather events and the depletion of natural resources.

Meanwhile, Ilmarinen continues to participate in the Paris Aligned Asset Owners commitment, which seeks to align investment portfolios with the objectives of the Paris Climate Agreement and achieve net zero emissions by 2050 at the latest.

Key climate actions include increasing investments in climate solutions, limiting exposure to fossil fuels such as coal and oil sands, and engaging with high-emission companies to encourage a shift towards low-carbon business models.

Climate-related risks and opportunities are also incorporated into scenario analysis and investment strategy, particularly in relation to capital adequacy and returns.

“Through our climate actions, we aim to ensure that our pension assets retain their value and generate stable returns in the long term,” Lindroos concluded.

“By directing investments towards low-carbon solutions and sustainable development, we secure the solvency of pensions for future generations.”

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