Axa has decided to divest its internally-managed assets from the companies most exposed to coal-related activities.
Announcing this, Axa chairman and CEO Henri de Castries, said this divestment would amount to €0.5bn. "Divesting from coal contributes both to de-risking our investment portfolios and to building better alignment with Axa's corporate responsibility strategy to build a stronger, safer and more sustainable society," he explained.
Speaking at Climate Finance Day in Paris on 22 May, De Castries also committed to "tripling our green investment footprint, aiming to reach to over €3bn by 2020 for our general account, coming principally from investments in clean technology private equity, green infrastructure, impact investment and green bonds."
The Axa chairman 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 preventing us from reaching the 2°C target [on global warming]."
But for a company of Axa's size, added de Castries, the measure that would produce the greatest impact remains "the integration of environmental, social and governance (ESG) criteria in our investment decisions," and he committed to "integrating the ESG footprint in all relevant asset classes of Axa's general account by end-2015."
De Castries complained that regulation is pushing the company to focus its investment strategy on a shorter-term time horizon than that which corresponds to its insurance liabilities. "Notably, the new IFRS [International Financial Reporting Standards] accounting rules and the lack of differential treatment for long-term investments such as infrastructure assets do not encourage the long-term focus that the insurance sector should mechanically have."
The Axa chairman said that, as long as the "systemic risk" of carbon is not correctly embedded into regulatory frameworks, through efficient carbon-pricing mechanisms and more broadly favourable treatment for longer-term investments that are necessary to limit climate risks, "it will always be a story of a few responsible actors doing their best within a broader financial system that is not designed for sustainability."