AXA Investment Managers will divest €165 million ($175 million) from fixed-income portfolios as a result of its new coal policy, relating to companies that derive 50% or more of revenues from fossil fuels.
The policy applies to 99.5% of the €717 billion assets managed by the French money manager, with fund of funds and index funds excluded, AXA IM said in a news release.
The firm will also divest €12 million from equity portfolios in relation to the policy.
“We strongly believe that divesting from coal can help to derisk portfolios over the long term by decreasing exposure to assets that are likely to become stranded in the future as the world moves to be in line with the +2°C scenario,” CEO Andrea Rossi said in the release.
The Intergovernmental Panel on Climate Change, a body under the auspices of the United Nations, considers a two degrees Celsius rise in global temperatures to be the maximum increase before the risk of global warming becomes visible.
“We want to engage with our clients, increasing awareness about the potential long-term risks related to the production and consumption of coal at current levels and encouraging investors to fully consider the long-term benefits of low-carbon portfolios,” Mr. Rossi added in the release.
AXA IM will begin to divest from the companies, specifically mining and electric utility firms, on June 30.
Parent company AXA SA, France's largest insurer, said in May 2016 it will stop investing in tobacco and divest all of its €1.8 billion of assets in the industry.