AXA Investment Managers pledge $193 million divestment

The asset manager will divest €177 million ($193 million) from fixed-income portfolios as a result of its new coal policy, relating to companies that derive 50 per cent or more of revenues from coal-related activities.

The policy – which was announced Tuesday 25 April – supplements AXA Investment Managers’ existing policies on palm oil and soft commodities derivatives in 2014 and on “controversial weapons” in 2008.

The divestment announcement is set to become effective from June 30 2017 and will apply to 99.5 per cent of AXA IM's €714 billion ($779 billion) portfolio, specifically relating to mining and electric utilities companies.

The divestment excludes multi manager and index funds, as well as clients with segregated mandates that want to opt out.

It will apply to €165 million ($180 million) of fixed income portfolios and €12 million ($13 million) of equities portfolios.

Andrea Rossi, Chief Executive of AXA Investment Managers (AXA IM), emphasised the crucial role that asset managers have to play in helping the transition to a low-carbon global economy.

The investor’s parent company – AXA Group – announced its €500 million ($545 million) divestment from coal two years ago.

Rossi said: “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.”

In a statement, AXA IM labelled coal as the most carbon-intensive energy source”, adding that they believe "divesting from coal helps to the global transition to a low carbon economy consistent with the +2C scenario proposed by the Intergovernmental Panel on Climate Change (IPCC)".

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.”

Matt Christensen, Global Head of Responsible Investment at AXA IM, reiterated these comments, saying:  “AXA IM has been committed to responsible investment for nearly 20 years. We have seen growing interest from clients in ESG [environmental, social and governance] and coal in particular and have been actively engaging with them on this.”

He added: “We believe that following COP21, the ratification of the Paris Agreement and growing momentum for fossil fuel divestment globally, now is the right time for AXA IM to make this move sending a strong message to the rest of our industry.”

The Innovate4Climate, Finance and Markets week will be held in Barcelona at the Fira de Barcelona, on 22-26 May 2017, organised by the World Bank Group. Innovate4Climate will be the global platform uniting leaders from across policy, multilateral, business and finance sectors to create the partnerships needed to unlock the trillions.