Coal
In line with the Net Zero Asset Alliance, we believe that companies should develop transition pathways towards decarbonization. There are two main principles we would like companies to adopt:
- There should be an immediate cancellation of all new thermal coal projects, including thermal coal plant, coal mines and related infrastructure (i.e., supplying products or services to thermal coal-based projects or business models) that are in pre-construction phase.
- There should be a phase-out of all unabated existing coal-fired electricity generation in accordance with 1.5°C pathways, as provided by the IPCC and referenced by the International Energy Agency (IEA) and Powering Past Coal Alliance (PPCA). The most recent energy system models require an accelerated transition in developed economies including phase outs in most thermal coal assets by 2030 for industrialized countries and a full phase out globally by 2040.
To achieve these two goals, the Fund has implemented two pillars: i) exclusions and ii) an engagement strategy.
Exclusions:
- Divestment from coal mining, applying a threshold of 1% revenues coming from thermal coal mining
Engagement plan until 2024:
- For the mining sector: strategy based on CAPEX consistent with goals of the Paris Agreement, including no new coal mines and ultimate phase out of coal production for unabated use (no carbon capture and storage) consistent with the Paris goals.
- For the utilities sector: plan for cessation of coal-fired power by 2030 in OECD countries and by 2040 in other countries, in line with the Powering Past Coal Alliance goals.
We will engage beyond this timeframe with companies which fail to align with these ambitions.
Oil & Gas
We support the Alliance position on fossil fuels. In particular, for oil and gas, we believe that:
- For the Upstream sector: no new oil and gas fields should be financed, built, developed, or planned. Investment should be limited to existing oil and gas fields (with an emphasis on investment that is required to support the global economy during the energy transition).
The Fund has implemented two strategies related to oil & gas: i) exclusions and ii) an engagement strategy.
Exclusions :
- Divestment from companies with revenues from oil and gas exceeding 10% across the entire value chain (upstream, midstream, and downstream) and including unconventional fossil fuels (shale oil & gas, oil sands production, unconventional drilling techniques).
Engagement:
- Despite having divested from the upstream industry, we participate to investor engagement networks, such as Climate Action 100+
- We also engage with transitioning companies and companies where revenues fall below our threshold
- Finally, we ask financial services companies to align their financing, underwriting and investing activities with the goals of the Paris Agreement and the achievement of net-zero emissions by 2050.
Green bonds and transitioning companies are still part of our investment universe and fall under specific considerations.
