The short-term target of Varma’s climate policy for investments is to reduce the carbon footprint in different asset classes by 2020. This target was already achieved by the end of 2017. The long-term target is to bring the portfolio in line with the 2-degree target of the Paris Climate Agreement.

1. Climate policy and carbon footprint of Varma’s
investments in 2017
12.2.2018
Carbon footprint of Varma’s investments | 12.2.2018 |1

2. The climate policy for Varma’s investments covers all asset
classes and outlines how Varma mitigates climate change in
its investment operations. The target is to reduce, by 2020,
the carbon footprint
• by 25% in listed equity investments
• by 15% in listed corporate bond investments and
• by 15% in real estate investments
Carbon footprint of Varma’s investments | 12.2.2018 |2
“We are developing our
portfolio to bring our
investments in line with
the 2-degree target.”
Varma’s CIO
Reima Rytsölä

3. Climate policy results in 2017
The short-term target of Varma’s climate policy for investments is to reduce the carbon footprint in different asset
classes by 2020. This target was already achieved by the end of 2017. The long-term target is to bring the portfolio in
line with the 2-degree target of the Paris Climate Agreement.
Real estate
investments
Corporate bondsListed equities
Result -27% Result -22% Result -18%
Realised
Target -25%
Forecast
Realised
Target -15%
Forecast
Realised
Target -15%
2017 target
achieved2016 target
achieved
2017 target
achieved
Carbon footprint of Varma’s investments | 12.2.2018 |3

4. Climate policy achievements in 2017
Carbon footprint of investments
in dramatic decline
• We achieved the CO2 reduction targets that
we set for all our asset classes for 2020.
• We are developing our investments align the
targets of the Paris Climate Agreement.
• Varma ranked in the top 6 in a WWF survey
on how well equity portfolios are aligned with
the Paris Climate Agreement.
• We began investing in green bonds in
2017. By year-end, they amounted to
approx. EUR 300 million in the portfolio.
• Size of the portfolio contained approx.
EUR 400 million at the end of 2017.
• Sustainability is integrated into all asset
classes and the ownership policy.
Sustainable equity
portfolio
• We expect companies to comply with
international norms and to report on the
impacts that climate change has on their
business operations now and in future.
Responsibility is part of share
ownership policy
Carbon footprint of Varma’s investments | 12.2.2018 |4

5. Carbon footprint of listed equity investments
Carbon footprint of Varma’s investments | 12.2.2018 |5
Varma’s listed equity investments 31 Dec 2017 31 Dec 2015 Change Varma vs. index
Carbon intensity
126 163 -22% -
Carbon footprint in relation to
revenue
173 237 –27% –39%
Market value (EUR bn) 13.2 10.8 22% -
Carbon footprint (tCO2e) 1,313,176 1,810,908 -27% -44%
Carbon footprint in relation to invested
capital
100 168 -41% -44%
Share of disclosing companies (in
relation to capital)
82% 85% -4% -

6. Carbon footprint of listed corporate bond investments
Carbon footprint of Varma’s investments | 12.2.2018 |6
Varma’s listed corporate bonds 31 Dec 2017 31 Dec 2015 Change
Varma vs. index 31
Dec 2017
Carbon intensity 112 171 -35% -
Carbon footprint in relation to revenue 169 217 -22% -57%
Market value (EUR bn) 3.8 3 27% -
Carbon footprint (tCO2e) 1,269,025 1,535,094 -17% -17%
Carbon footprint in relation to invested
capital
333 515 -35% -23%
Share of disclosing companies (in relation
to capital)
82% 86% -5% -

7. Carbon footprint of direct real estate investments
Carbon footprint of Varma’s investments | 12.2.2018 |7 (3)
Varma’s direct real estate investments 31 Dec 2017 31 Dec 2015 Change
Carbon footprint (tCO2) 45,682 58,050
Share of flats 17% 18%
Share of commercial properties 83% 82%
Carbon footprint in relation to gross square metres (CO2 kg/gross m2
) 27.8 33.8 -18%
Carbon footprint of flats in relation to gross square metres (CO2
kg/gross m2
)
20.8 27.2 -24%
Carbon footprint of commercial properties in relation to gross square
metres (CO2 kg/gross m2
)
29.9 35.6 -16%
Market value of real estate portfolio included in the calculation (EUR bn) 2.1 2.2
Share of flats 35% 29%
Share of commercial properties 65% 71%
Sites included in the calculation as % of the market value of the entire
direct real estate portfolio
74% 66%

8. Listed equity investments
We invest in companies with the best
practices. We analyze companies’
preparedness for climate change by using
varios data sources and by meeting
companies. We have also established
sustainable equity portfolio.
We invest in companies with the best practices
and take into account the carbon-intensity of
their operations as part of the selection process
and sector allocation. In our meetings with
companies, we influence the attention that is
paid to climate change in their operations.
Listed corporate bond
investments
In buildings, carbon dioxide emissions are
caused by energy consumption, which we are
reducing by improving the energy efficiency of
the buildings. Varma’s most important buildings
will be certified according to the BREEAM
environmental rating system by 2025. We are
increasing the use of renewable energy.
Real Estate
Carbon footprint of Varma’s investments | 12.2.2018 |8
Climate-friendly investments in different asset classes