As part of its climate policy ODDO BHF Asset Management will from now on exclude coal investments in all portfolios which integrate ESG criteria.
Overall, this represents €6.6 bn which is equivalent to about 12% of its assets under management. Specifically, the objective of the coal exclusion policy is to exclude any mining company that generates more than 5% of its revenues with coal and any power generation company that generates more than 30% of its revenues from coal.
According to the International Energy Agency (IEA) around 30% of global CO2 emissions in 2017 came from coal combustion. In addition to the high CO2 emissions, mining and use of coal have negative ecological and social consequences such as water and soil pollution or the impairment of human health. ODDO BHF AM believes that any coherent strategy to combat global warming must address coal investments.
"It's increasingly clear that coal is also economically at a dead end", said Nicolas Jacob, head of ESG Research at ODDO BHF AM. "If the regulatory restrictions on CO2 emissions continue to tighten, most of the proven coal reserves will not be exploited, resulting in substantial financial losses of several hundred billion dollars. So, for an asset manager with fiduciary duties for long-term investors it makes sense to exclude coal from its investment universe."