At OP sustainability is everything. When establishing an entirely new kind of impact fund, the leading financial services group trusted Castrén & Snellman’s expertise.
An increasing number of investors want to not just make money, but make a difference.
‘This shift in values is particularly clear in younger investors. Sustainability has changed investment activities a great deal. Investing has become more difficult, but also more interesting’, says Tuomas Virtala, CEO, Asset Management, at OP Corporate Bank.
The first wave came in the form of ethical and sustainable investing, which focused on either avoiding investments in unethical industries or encouraging companies to act more sustainably.
In recent years, sustainable investing has been joined by impact investing, in which global problems are tackled with private money.
‘Impact investing is not about charity but about making a positive impact as well as a competitive profit. It is the only sustainable way to arrange financing to solve global problems’, Virtala says.
Demand for Impact Fund Exceeded Expectations
OP, Finland’s leading financial services group is a pioneer of impact investing. Last year, OP collaborated with Finnfund to establish Finland’s first impact fund to invest in emerging markets.
Finnfund is a development financier that builds a sustainable world by investing in responsible and profitable businesses in developing countries. Finnfund is owned by the Finnish State, Finnvera and the Confederation of Industries.
The new impact fund, OP Finnfund Global Impact Fund I, raised 76 million euros in its first round of funding. After the second round, the fund’s size stands at 135 million euros.
‘The investor interest exceeded our expectations. It is clear that investors are keen to promote sustainable development and are excited by the growth potential of emerging markets, despite the ongoing pandemic’, Tuomas Virtala says.
The fund is seeking to achieve measurable positive impacts on climate change, food security, gender equality and the availability of financing. The fund’s main industries are renewable energy, financial institutions and sustainable agriculture.
‘By investing in developing markets, we can achieve major impacts. The investments are aimed at first getting the fundamentals in place in the target markets. For example, replacing generators with more sustainable means of producing energy. Once the foundations are in place, we can move on to more demanding projects, such as constructing mobile phone networks.’
Sustainability Part of Every Employee’s Day
Establishing a new impact fund is just one example of OP’s sustainability work.
‘Sustainability is an integral part of OP’s strategy and is reflected in the daily work, decisions and activities of everyone at the company’, Tuomas Virtala says.
OP’s corporate responsibility programme is framed around four themes: OP aims to foster a sustainable economy, support local vitality and community spirit, improve financial literacy in Finland, and use their intellectual and information capital in a responsible way.
According to Virtala, sustainability expertise was previously centralised in a separate asset management unit, but now these experts have been placed in every unit.
‘One unit is no longer enough. Sustainability work and expertise needs to be integrated into every function and throughout the entire value chain.’
In addition to their corporate responsibility programme, each unit in OP has its own responsibility principles.
‘Asset management is a pioneer in promoting sustainability within OP. We provide the company sustainability expertise relating to wealth management and foster this expertise by training our employees and sharing knowledge.’
A Good Partner Knows the Best Practices
Castrén & Snellman and OP have a long history of working together. Among other projects, Castrén & Snellman assisted OP in the establishment of Finland’s first impact fund to invest in emerging markets last year.
According to Tuomas Virtala, Castrén & Snellman has been a good partner in sustainability work.
‘It is vital that our partners understand the best sustainability practices. A law firm that has a clear vision of the smartest way to do something can help us learn and develop’, Virtala says.
It is also important for law firms to anticipate future regulation.
‘The regulation of sustainability matters is constantly developing, and we want to be able to anticipate it as best we can so that we can make sure we are keeping up.’
Some Success Stories from OP’s and C&S’s Shared Journey
2021
OP Financial Group – Sale of Checkout Finland to Paytrail
OP Corporate Bank – Financing Arrangement for OP Vuokrakoti
OP Corporate Bank – Finance of Acquisition of Profit Software
2020
Caverion Corporation and Manager Banks – Issue of EUR 35 Million Hybrid Bond
OP and Finnfund – Establishment of a New Global Impact Fund
Danske Bank, Nordea and OP Financial Group – Sale of Automatia Pankkiautomaatit to Loomis
Ilmarinen, OP and LocalTapiola – Acquisition of Stakes in REDI and Tampere Central Deck and Arena Project
OP Cooperative – Sale and Leaseback of OP Headquarter Campus in Helsinki
2019
OP Corporate Bank – Financing Arrangement for Veho
Lenders – Metsä Board’s Bank Financing Facility with Sustainability Targets
OP Group – Successful Defence of OP Group in Major FCCA Dominance Investigation
OP Corporate Bank – SRV Group’s Issue of EUR 58.4 Million Capital Notes
OP Financial Group – Reorganisation of Shareholding in Access Capital Partners
Pohjola Health – Sale of Occupational Health Services Business
OP Life Assurance Company – Disposal of a Helsinki CBD Property
Fund Managed by OP Real Estate Asset Management – Konepaja Hotel Development Project
2018
OP Corporate Bank – EUR 43 Million Financing Arrangement for Kreate
OP Corporate Bank and Nordea Bank – Revolving Credit Facility Agreement for Lehto
OP Corporate Bank – Financing of the Acquisition of Roima Intelligence
OP Financial Group – Sale of Residential Portfolio to Kojamo Group
Central Deck and Arena – Pioneering Real Estate Development Project Featuring Finland’s Largest Multi-purpose Arena in Tampere City Centre
2017
OP Toimitilakiinteistö – Acquisition of Modern Logistics Warehouse
OP Rental Yield – Acquisition of BREEAM Certified Office Properties
2016
OP Corporate Bank – Financing of Intera Partners’ Acquisition of Sikke Security Oy (formerly ISS Security Oy)
OP Property Management – Sale of a Large Real Estate Portfolio to M7 Real Estate
Helsinki Area Cooperative Bank – Court Case Concerning Electronic Identification Services Act
2015
OP-Rental Yield – One of Finland’s Largest Real Estate Portfolio Transactions in the 21st Century
OP-Pohjola & LähiTapiola – Construction and Development of REDI Shopping Centre and Parking Facilities
2014
OP-Pohjola – Tender Offer for All Shares in Pohjola Bank
OP-Rental Yield – Acquisition of a Property Portfolio Comprising Over 20 Residential Properties and Over 800 Housing Units
