HONG KONG (BLOOMBERG) – AIA Group has offered off nearly US$10 billion (S$13.6 billion) of investments in coal mining and coal-fired energy companies as strain grows on monetary companies to chop ties with the sector. The insurer accomplished the complete sale of straight managed fairness and glued earnings portfolios in October, seven years forward of its unique goal, based on a press release.
It mentioned it will not make new investments in companies straight concerned in coal mining or producing electrical energy from coal. “The realm that we will make the largest contribution and the largest influence is actually via our investments,” chief govt Lee Yuan Siong mentioned in an interview in Hong Kong.
AIA’s divestments in coal was not on account of strain from environmental teams and got here after the agency had been integrating environmental, social and governance metrics into its technique for a while, he mentioned.
The shirt sponsor of Tottenham Hotspur had come underneath strain to promote its investments in coal. It joins a rising variety of companies and establishments, together with Harvard College and Allianz World Traders in curbing holdings.
In response to analysis by the Insure Our Future marketing campaign, 65 insurers with mixed property of US$12 trillion have thus far divested from coal. Mr Lee mentioned it was harder to divest the bonds and loans as such investments are often held to maturity and fewer liquid. The insurer, which manages greater than US$200 billion of property, can also be committing to reaching net-zero greenhouse gasoline emissions by 2050.
AIA buys inexperienced bonds and in addition has an exclusion listing to verify it’s not investing in industries which can be large pollution, mentioned Mr Lee. It engages with corporations it invests in to cut back their carbon footprint.
Over the previous few years, the “carbon depth” of AIA’s fairness holdings has declined, mentioned Mr Lee. AIA’s operational emissions will likely be overseen by a brand new Local weather and Web-Zero Steering Committee that studies on to Mr Lee.
AIA’s chief funding officer could have direct oversight of the combination of the net-zero dedication into its portfolio engagement course of. AIA’s transfer was welcomed by environmental group Insure Our Future, however it additionally referred to as on the insurer to make clear the way it defines coal corporations to keep away from any threat of “greenwashing”.
“Assuming AIA’s announcement displays actuality, it sends a robust message from the largest pan-Asian insurance coverage firm to different Asian institutional buyers that coal must be phased out shortly,” mentioned Mr Peter Bosshard, international coordinator of Insure Our Future, in a press release.
Individually, AIA, which as soon as counted on Chinese language travellers for as a lot as half of its Hong Kong insurance coverage gross sales, has seen its enterprise harm by journey restrictions.
“We’re all trying ahead to when the border can open up so that folks can journey extra freely,” mentioned Mr Lee. “Within the meantime, what we have now been doing is to encourage our brokers to concentrate on the Hong Kong home enterprise.”
