Finnfund adopts new climate and energy statement to guide investments
Finnfund, a development financier, has released a new statement on climate and energy. The statement commits the company to the Paris Agreement goals and outlines how it will manage its portfolio and new investments towards net-zero emissions.
Finnfund, the Finnish Development Cooperation Fund, has launched a new statement on climate and energy that will guide its investment activities. The statement formalizes the company's commitment to the Paris Agreement and details practical implications for its portfolio management, investment processes, and carbon footprint measurement.
The development financier aims to align its operations with climate goals, committing to keep its investment portfolio carbon negative and ensuring all new investments adhere to the Paris Agreement's objectives for reaching net-zero emissions by 2050. Finnfund has also pledged to invest €1 billion in climate finance by 2030, encompassing both mitigation and adaptation projects.
In February 2021, Finnfund reported that its total investment portfolio had a negative carbon balance, making it the first development financier to achieve this status. The company attributes this result significantly to its substantial investments in forestry, and it commits to maintaining this carbon-negative stance moving forward.
The statement also emphasizes Finnfund's dedication to advancing transparent and harmonized climate finance disclosures. The organization has contributed to developing tools like FRESCOS for accounting carbon sequestration in forestry projects. While adhering to exclusion lists that prohibit financing coal and fossil fuels, Finnfund may, under specific circumstances and for a limited time, finance natural gas power plants. The new statement, effective from July 2021, will apply to all future investment decisions, with disclosures aligning with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.