AXA Investment Managers has followed in the footsteps of its parent group as it divests from companies in its portfolio most exposed to coal.
Effective from 30 June 2017, the asset manager will divest from companies that derive more than 50 per cent of revenues from coal-related activities, which will hit €177m (£150m) of fixed income and equities assets.
The divestment excludes multi manager and index funds, as well as clients with segregated mandates that want to opt out, but still covers 99.5 per cent of its €714bn AUM.
It will apply to €165m of fixed income portfolios and €12m of equities portfolios.
It implemented similar policies on palm oil and soft commodities derivatives in 2014 and on “controversial weapons” in 2008.
Axa IM chief executive Andrea Rossi says asset managers have an important role to play in helping the transition to a low-carbon global economy and notes parent company Axa Group announced its €500m divestment from coal two years ago.
“We strongly believe that divesting from coal can help to de-risk portfolios over the long term by decreasing exposure to assets that are likely to become ‘stranded’ in the future as the world moves to be in line with the +2°C scenario.”
Rossi says Axa IM wants to raise awareness about the long-term risks related to the production and consumption of coal at current levels and encourage investors to consider the long-term benefits of low carbon portfolios.
The firm has been seeing growing interest from clients on ESG and coal in particular, says Matt Christensen, global head of responsible investment at AXA IM.
Christensen says their timing from influenced b the the ratification of the Paris Agreement and growing momentum for fossil fuel divestment globally.