The insurance company Axa has said it will remove around €500m (£355m) of coal investments from its portfolio, in a move that reflects long-term concerns in the insurance industry over climate change.
The company has also pledged to triple its investments in green technologies and services to more than €3bn by 2020 and provide investors with more information on the risk to its investments from climate change.
Henri de Castries, chairman and chief executive of the French insurer, said the company’s duty to its shareholders and policyholders dictated the decision, citing current scientific advice that the world must avoid warming of greater than 2C above pre-industrial levels to avoid the worst consequences of climate change. He said: “It is our responsibility, as a long-term institutional investor, to consider carbon as a risk and to accompany the global energy transition. The burning of coal to produce energy is today, clearly, one of the biggest obstacles from reaching the 2C target.”
He added: “For this reason, Axa has decided to divest from the companies most exposed to coal-related activities.” But this would only apply to “assets managed internally”, he said.
The company said it would remove from its portfolio and refrain from future investment in mining companies that derive more than half of their turnover from coal mining, and in electrical utilities that take more than half of their energy from thermal coal power plants.
The partial divestment was accompanied by the caveat that the company would rely on specialist data providers to identify the companies involved, and the new investment criteria would not extend to “other carbon-intensive industries or other types of coal-related businesses for which exposure data is insufficiently reliable”. The divestment applies only to the company’s general account.
Companies with fossil fuel investments have come under pressure in recent years to disclose their exposure to the risk of climate change. The Guardian’s Keep it in the ground campaign has highlighted fossil fuel divestment and called on the Wellcome Trust and the Bill and Melinda Gates Foundation, to divest from fossil fuel assets.
Christiana Figueres, the UN’s top official on climate change, said governments could set the direction on reducing emissions, but that businesses must be the “engine of change”.
François Hollande, the president of France, urged pension funds in particular to disclose their risk from fossil fuel assets, at a conference this week in Paris focusing on business and climate change. This December, world governments will meet in Paris to forge a new global agreement on climate change, with commitments from both developed and developing countries to limit greenhouse gas emissions, with a view to remaining within the 2C threshold that scientists say is necessary if global warming is not to become catastrophic and irreversible.
