Versorgungsanstalt des Bundes und der Länder (VBL), which supports the global climate goals of the Paris Agreement has chosen Nordea Asset Management (NAM) after "an intensive selection process" to run a €1.25bn mandate with effect from 1 November 2024.

This European equity portfolio will be managed relative to the MSCI Europe Climate Paris-aligned benchmark.

In a statement on 19 November, VBL said that as part of its fiduciary duty, it takes into account both financial aspects and climate protection in its investment strategy.

Michael Leinwand, VBL's chief investment officer, said: "Over the past three years, we have already reduced the CO2-intensity of our equities and corporate bonds by more than 25 per cent. It is now important for us to continue on this CO2 reduction path".

The emissions from VBL's equity and corporate bond portfolio are currently below the target set for 2025. By the end of 2025, the target is to be below 92 tons of CO2 equivalent per million euros of turnover.

"The mandate with Nordea Asset Management will help us deliver on this objective and offers long-term opportunities for a further reduction of our carbon-footprint", Leinwand said.

Jan Obländer, responsible for asset manager selection at VBL, said: "Nordea Asset Management convinced VBL with the breadth of its responsible investment team, efficient and risk-controlled investment processes and a clear climate strategy."

With the Nordea European Stars Equity Strategy, NAM has a proven track record in choosing companies that are industry leaders in CO2 reduction and that offer innovative products contributing to a low-emission economy. On this basis, both an attractive return relative to the MSCI Europe Climate Paris-aligned benchmark can be expected and a contribution to a more sustainable economy can be achieved, the statement said.

Christophe Girondel, global head of distribution at NAM said: "The fact that we can support VBL in the implementation of its sustainability strategy confirms to us that we are on the right track with our approach of reconciling climate objectives and investment performance."

From the outset, the portfolio will have a positive impact on the overall carbon footprint of VBL's investments. By managing the portfolio against the Paris-aligned benchmark, VBL is pursuing an ambitious CO2 reduction path that will reduce greenhouse gas emissions by seven percent annually.

With around five million insured persons, 5,400 employers and annual benefit payments of 5.8 billion euros to 1.5 million pensioners, Versorgungsanstalt des Bundes und der Länder (VBL) is the provider of a pension fund for public service employees in Germany. For this purpose, VBL manages investments with a market value of around 60 billion euros. Participating employers of VBL include the Federal Government, the Länder, local authorities and social security institutions.

Nordea Asset Management is part of the Nordea Group, the largest financial services group in Scandinavia.