AXA Investment Managers (AXA IM) is divesting from companies that get more than half their revenue from coal.
The move will see AXA IM divest from mining and electric companies specifically that derive more than 50% of their revenue from coal-related activities.
Effective from 30 June, the coal policy will apply to €714 billion (99.5%) of assets under management at AXA IM, excluding any funds in the 'funds of funds' or 'index funds' categories.
The decision means AXA IM will be divesting approximately €165 million of fixed income portfolios and €12million of equities portfolios.
Andrea Rossi, AXA IM CEO, said: "As a responsible investor and active steward of our clients' assets, we strongly believe that divesting from coal can help to de-risk portfolios over the long term, as the world moves to be in line with the +2?C scenario."
According to the Intergovernmental Panel on Climate Change (IPCC), +2?C is the maximum increase in temperature before significant risks to society are triggered by global warming.
Staying below this threshold requires significantly limiting carbon emissions globally and coal is the most carbon-intensive energy source.
The new coal policy is AXA IM's latest move towards responsible investment - it has already implemented policies on palm oil, soft commodities derivatives, and controversial weapons, as well as working to integrate ESG across all investment strategies.
"This decision is consistent with our ambitions for continued and greater ESG integration across AXA IM and it is in line with our belief that asset managers have an important role to play in helping the global transition to a low carbon economy," said Rossi.
All its portfolio managers will be working closely with AXA IM's Responsible Investment team to make sure all funds are in line with the coal policy and its clients have a smooth transition in their portfolios.
Clients in segregated mandates will have the option to opt out of this policy should they wish to do so.
"We have been committed to responsible investment for nearly 20 years and have seen growing interest from clients," Rossi added.
"We want to engage with our clients, increasing awareness about the potential long-term risks related to the production and consumption of coal at current levels and encouraging investors to fully consider the long-term benefits of low carbon portfolios."
First published 28.042017
Lindsay.sharman@wilmingtonplc.com
