AIA Sells Out of Almost $10 Billion of Coal Investments

  • In Business
  • 2021-12-07 02:36:07Z
  • By Bloomberg

(Bloomberg) -- AIA Group Ltd. has sold off almost $10 billion of investments in coal mining and coal-fired power businesses as pressure grows on financial firms to cut ties with the sector.

Most Read from Bloomberg

  • Sand and Soldiers Mix as Troops Move In to Protect Cancun Tourists

  • Even in the Metaverse, Not All Identities Are Created Equal

  • The World's Relentless Demand for Chips Turns Deadly in Malaysia

  • Automating the War on Noise Pollution

  • Meet the New Climate Refugee in Town: Coyotes

The insurer completed the entire sale of directly-managed equity and fixed income portfolios in October, seven years ahead of its original target, according to a statement. It said it won't make new investments in businesses directly involved in coal mining or generating electricity from coal.

"The area that we can make the biggest contribution and the biggest impact is really through our investments," Chief Executive Officer Lee Yuan Siong said in an interview in Hong Kong. AIA's divestments in coal was not due to pressure from environmental groups and came after the firm had been integrating environmental, social and governance metrics into its strategy for some time, he said.

The shirt sponsor of Tottenham Hotspur had come under pressure to sell its investments in coal. It joins a growing number of firms and institutions, including Harvard University and Allianz Global Investors in curtailing holdings. According to research by the Insure Our Future campaign, 65 insurers with combined assets of $12 trillion have so far divested from coal.

Lee said it was more difficult to divest the bonds and loans as such investments are usually held to maturity and less liquid. The insurer, which manages more than $200 billion of assets, is also committing to achieving net-zero greenhouse gas emissions by 2050.

AIA buys green bonds and also has an exclusion list to make sure it's not investing in industries that are big pollutants, said Lee. It engages with companies it invests in to reduce their carbon footprint.

Over the last few years, the "carbon intensity" of AIA's equity holdings has declined, said Lee.

AIA's operational emissions will be overseen by a new Climate and Net-Zero Steering Committee that reports directly to Lee. AIA's chief investment officer will have direct oversight of the integration of the net-zero commitment into its portfolio engagement process.

Away from its divestment, AIA, which once counted on Chinese travelers for as much as half of its Hong Kong insurance sales, has seen its business hurt by travel restrictions.

"We are all looking forward to when the border can open up so that people can travel more freely," said Lee. "In the meantime, what we have been doing is to encourage our agents to focus on the Hong Kong domestic business."

Most Read from Bloomberg Businessweek

  • Return-to-Office Chaos Is the Best Thing to Happen to Consultants Since Y2K

  • The Fall of a Russian Cyberexecutive Who Went Against the Kremlin

  • Paige Bueckers, a College Athlete Who's Cashing In

  • The Meme Stock

  • David Baszucki, Roblox's 'Builderman'

©2021 Bloomberg L.P.


More Related News

Investors Turn to Europe as Safer Bet in Global Equity Rout
Investors Turn to Europe as Safer Bet in Global Equity Rout

(Bloomberg) -- When Goldman Sachs Group Inc. surveyed the audience at its annual global strategy conference this month about which stocks will be this year's...

Spanish Economy Grew 2% in Fourth Quarter, Beating Estimates
Spanish Economy Grew 2% in Fourth Quarter, Beating Estimates

(Bloomberg) -- Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast.Most Read from BloombergApple to Rival Square ...

Wall Street
Wall Street's Big Bet on Chinese Markets Is Going All Wrong

(Bloomberg) -- The bar for China's financial markets to do better this year was so low, virtually everyone on Wall Street was saying the country's stocks and...

China Fintech PingPong Weighing $1 Billion Hong Kong IPO, Sources Say
China Fintech PingPong Weighing $1 Billion Hong Kong IPO, Sources Say

(Bloomberg) -- Chinese fintech startup PingPong is considering an initial public offering in Hong Kong to raise as much as $1 billion, people with knowledge ...

Paris Wants to Become the Mayfair of Europe for Hedge Funds
Paris Wants to Become the Mayfair of Europe for Hedge Funds

(Bloomberg) -- Back in 2016, trying to get an ambitious young financier to choose France over Britain was an often hopeless task. Most Read from...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply


Top News: Business