Ilmarinen supports call for effective GHG pricing
Ilmarinen has signed the new Call on Carbon initiative, which aims to ramp up climate investments and effective carbon pricing. The new petition was launched by Climate Leadership Coalition, Haga Initiativet and Skift Business Climate Leaders, and supported by Corporate Leaders Group, BCSD Portugal and CER – Sustainable Business Network Slovenia.
The petition emphasizes that the countries should back their net zero targets with Paris Agreement consistent effective and reliable carbon pricing instruments, align their carbon pricing instruments where appropriate between countries to create a stable investment environment and finalize the rules for international market mechanism.
There are concerns, as today only less than a quarter of global greenhouse gas emissions are covered by carbon pricing initiatives, and only a fraction of those are within the recommended range for the Paris Agreement. The direct fossil subsidies are a tenfold and the indirect costs of the fossil combustion and the impacts magnified by the climate change a hundred times bigger than the revenues raised by the carbon pricing.
For an investor, such as Ilmarinen, it is important to agree on the terms of carbon pricing and emission trading.
– It's important that GHG emitters pay for emissions. When emissions are priced, market participants can include the matter in their decision-making. This encourages emission reductions, states Karoliina Lindroos, Head of Responsible Investment at Ilmarinen.
Towards carbon neutral investments by the end of 2035
Ilmarinen has set a goal of carbon neutral investments by the end of 2035. The carbon risk is evaluated broadly. The aim is to affect the companies in such a way, that they would do concrete actions to reduce their emissions.
As one of the first steps towards carbon neutrality, in 2020 we extended our carbon intensity assessment from only coal to also other fossil fuels. We will only invest in high carbon risk companies, if the company has credible emission reduction targets and demonstrates that it is reducing the carbon intensity of its business.
– The pricing systems for carbon have increased during the past years. However, they cover only less than one quarter of the green house gas emissions globally. We expect the increasing trend regarding pricing systems to continue. We use scenario models to study the potential effects of the evolving carbon pricing to our investments, Lindroos says.
Countries are urged to act fast, already in 2021. This would support the United Nations Climate Change Conference in Glasgow in November and make it a true game changer.
Climate Leadership Coalition is a European non-profit climate business network, with 81 members. Ilmarinen participated in signing an earlier CLC pledge already in 2019, targeted for the EU leaders to reach carbon neutrality.
For more information
- Read more on Call on Carbon(calloncarbon.com)
- Read more on the CLC petition for EU leaders in 2019, signed by Ilmarinen (in Finnish)
- Read more on Ilmarinen’s view regarding the United Nations Climate Change Conference in Madrid in 2019 (in Finnish):
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