Ilmarinen identifies water as 'most important' natural resource for investment targets

Written by Paige Perrin

14/05/2025

Finland’s Ilmarinen has said water is the “most important” natural resource for its investment targets, according to its latest biodiversity analysis.

The report assessed how its direct listed equity and corporate bond investments depend on and impact natural capital and ecosystem services.

This analysis revealed that approximately 38% of the investments have been invested in industries where environmental impacts and dependencies play a “significant” role.

Ilmarinen's senior vice president, responsible investment, Karoliina Lindroos, said the biggest dependencies on nature in its investments are in the pharmaceutical industry, the semiconductor industry, and the paper and forest industries, which cover about a third of its exposure.

Investment targets in key environmental sectors were examined more closely using Carbon Disclosure Project reports.

These reports showed that the companies are aware of environmental issues. They consider environmental risks and opportunities in their strategy and financial planning, and have processes to identify, assess, and manage these risks and opportunities.

"This indicates that companies consider environmental issues to be essential for business operations, so they should be taken into account in their business," Lindroos added.

Water use and pollution emerged as major drivers of nature-related impact in the analysis.

"Almost all companies in the paper, forest and pharmaceutical industries have water-related targets, and they also identify and classify water-related pollutants and water-related pollution generated in their operations. On the other hand, only a few companies in the semiconductor industry had set water-related targets,” she said.

"The economy is deeply dependent on natural capital and biodiversity. As a long-term investor, it is important for us to know what kind of nature-related impacts and risks are associated with our investments.

"Analysing investments from a nature perspective helps us identify industries and companies that are associated with nature dependencies and impacts and that we target with influencing measures. It also provides background information on companies' actions to support advocacy work.”

This is the third report made by Ilmarinen on biodiversity in its investment activities, which was prepared in accordance with the Taskforce on Nature-related Financial Disclosures framework.

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