Finnish pension funds including Varma and Elo, both based in Helsinki, are considering divesting from forestry firm Stora Enso with the company being accused of sexism and environmental crimes in the country’s northern region of Suomussalmi, according to an emailed comment to Pensions & Investments.

On Aug. 15, logging machinery belonging to Stora Enso was repeatedly driven over a shallow river within a forest in Suomussalmi, and in doing so killed thousands of endangered freshwater pearl mussels, as reported by Finnish public broadcasting company YLE.

Kai Mykkanen, Finland’s minister of climate and the environment, said on social media site X (formerly Twitter): “In Suomussalmi, endangered species were destroyed due to outrageous activity. This is a criminal matter. This would not have happened if it had been done correctly. Stora Enso must find out why the judgment failed in the supply chain. Let’s also see if the rules can still be improved.”

According to YLE, when female biologist Myyri Sysivesi confronted a Stora Enso driver over the damage his vehicle was doing to the mussels, he was dismissive and said, “You could take off your bra before you come to talk to me.”

At least four Finnish pension funds — including Varma, Elo, Helsinki-based Ilmarinen and Turku-based Veritas — are investors in Stora Enso, with a collective €492 million ($537 million) invested in the firm.

Hanna Kaskela, senior vice president for sustainability and communications at Varma, said in an emailed response to P&I: “Most importantly, this is a very serious case. The actions we have taken so far include moving the case to our observation list and being in direct contact with Stora Enso. We will decide on the next steps once we get further information. For now, it is important to work to correct the already done damages and prevent further damage to the site.”

Varma’s invest in Stora Enso totaled €79 million as of Dec. 31, while the pension fund had total assets of €59.1 billion as of June 30.

An Ilmarinen spokesperson in response to a P&I inquiry, referred to the pension fund’s responsible investment policy. The policy states that through principles of engagement and active ownership Ilmarinen engages with its investees and looks to highlight sustainability-related business risks and opportunities.

Ilmarinen had €243 million invested in Stora Enso, and total assets of €59 billion as of Dec. 31.

Veritas CIO Laura Wickstrom said in response to P&I: “We expect Stora Enso to submit a comprehensive report on the incident. We also expect the company to communicate clearly how it will correct the damages caused and how it will make sure that nothing like this will happen again.

“If we are not satisfied with the outcome of the above-mentioned process, exit is the final alternative we have at our disposal. As an active owner, we always first talk to the management and start an active dialogue before exercising the exit option.”

Veritas had €21 million invested in Stora Enso, and total assets of €4.4 billion as of Dec. 31.

Hans Sohlstrom, president and CEO of Stora Enso, said in a news release that the firm took immediate action as soon as it became aware of the violation. The news release also noted that Stora Enso had suspended harvesting in all areas throughout Finland where there are restrictions under the Water Act, the Forest Act or the Nature Conservation Act.

Elo CIO Jonna Ryhanen said in an emailed response to P&I: “We regard this incident to be a very serious act of damage and negligence. It is important that the company compensates for the damage that has occurred and corrects its processes so that nothing like this can happen again.

“What happened is a clear reputational damage to the company, which can also have a negative impact on the stock price development. At Elo, we invest our funds responsibly, considering environmental aspects, and in this situation, partial sale of shares is not excluded either. We will discuss with the company so that we can get a better picture of what happened.”

Elo had €151 million invested in Stora Enso and €30 billion in assets as of Dec. 31.