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Climate effects

Mitigation of climate change and support for adaptation to it are among Finnfund’s key objectives and development achievements. This is also reflected in Finnfund’s focus on climate change mitigation and adaptation activities, with investments in renewable energy, sustainable forestry, and agriculture and financial institutions. The last of these also includes funding for microfinance. Finnfund’s investments are also a key part of Finland’s official climate-related financing.

Finnfund is committed to investing 105 million euros in businesses which mitigate climate change and help people in developing countries adapt to it. These climate investments will be made in 2019-2021.

Climate and energy statement guides our climate actions

In July 2021, Finnfund adopted a new Statement on Climate and Energy. With this statement, Finnfund expresses its commitment to the objectives of the Paris Agreement and explains what this commitment means in practice for its portfolio management, investment process and measuring of the portfolio’s carbon footprint.

Finnfund strives to take the lead among development financiers in the transition to a net-zero carbon future while supporting the broader sustainable development agenda.

The statement is built upon three key targets:

  1. We are committed to keep our investment portfolio net carbon negative and align all new investments with the Paris Agreement.
  2. We will make €1 billion worth of new investments in climate finance by 2030.
  3. We contribute to the push for more systematic, harmonised and transparent climate finance disclosures and reporting.

This statement is effective as of July 2021 and will be applied to all new investment decisions.

As of 2021, Finnfund will also adopt and make disclosures consistent with the recommendations of the Task-Force on Climate-related Financial Disclosures (TCFD).

You can read the full text of the Climate and Energy Statement here.

In December 2022, Finnfund published a clarifying note on its position on fossil fuels, underlining Finnfund’s commitment to the Paris Agreement on Climate Change as well as the Statement on International Public Support for the Clean Energy Transition, adopted on the occasion of COP-26 in Glasgow in November 2021.

You can read the note here: Note on Finnfund’s Climate and Energy Statement.

We assess every investment

Finnfund assesses the climate effects of every investment before the investment decision as well as annually during the investment period. This assessment includes the absolute emissions of the investment, avoided emissions for energy investments, and carbon removals of the forestry projects.

In addition, Finnfund accounts the portfolio net climate effect annually and the results are published as part of Finnfund’s Annual Report.

Finnfund’s carbon accounting stems from its desire to better understand the climate impacts of all its investments. The methodology and the process of climate accounting at Finnfund is further explained in this article.

Finnfund first development financier to report carbon net-negative investment portfolio

In May 2021, Finnfund released data showing that its total investment portfolio has a net negative carbon balance. The figures for 2019 indicate that Finnfund’s investments removed 134,679 tCO2e more than they emitted.

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