AIA disposes of almost US$10b of coal investments
HONG KONG: AIA Group Ltd has sold off almost US$10 billion of investments in coal mining and coal-fired power businesses as pressure grows on financial firms to cut ties with the sector.
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.
“The area that we can make the biggest contribution and the biggest impact is really through our investments,” said chief executive officer Lee Yuan Siong.
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.
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 US$12 trillion have so far divested from coal.
Lee said it was more difficult to divest the bonds and loans as such investments were usually held to maturity and less liquid.
The insurer, which manages more than US$200 billion of assets, is also committing to achieving net-zero greenhouse gas emissions by 2050.
Over the last few years, the “carbon intensity” of AIA’s equity holdings had 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 travellers 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.