AMP Capital has announced it will screen out companies with a material exposure to fossil fuels in its Responsible Investment Leaders (RIL) range of funds, in response to client demand.
The RIL Charter of Operation will now screen out companies that have more than a 20% exposure to mining thermal coal, exploration and development of oil sands, brown-coal (or lignite), coal-fired power generation, transportation of oil from oil sands or conversion of coal to liquid fuels/feedstock.
AMP Capital Head of Environmental, Social and Governance Research Ian Woods said: "The Charter of Operation requires the RIL funds to avoid investing in companies with a material exposure to activities that have a high negative social impact including the production and manufacture of tobacco, nuclear power (including uranium), armaments, alcohol, pornography and gambling.
"Increasingly, responsible investors also want their portfolios to mirror their views on the need to address climate change.
"Under the terms of the charter, most companies with material fossil fuel exposure are already excluded. However, we feel having a formal limit on fossil fuels more clearly reflects investors' growing interest and concern regarding these investments."
While many funds talk about responsible investing and environmental, social and governance (ESG) factors, very few have taken the step of actively screening companies with material exposure to fossil fuels. Generally a 'best of sector' approach is taken.
The new policy will impact RIL diversified funds, the RIL Australian Share Fund, the RIL Diversified Fixed Income Fund and the RIL International Share Fund.
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Dennis Rodman from Rodman Enterprises
3 comments on this article
wrote: Does this mean that they don't want to enable the hundreds of millions of homeless people have access to clean water (water purification requires electricity) or electricity, hot food and if they are lucky enough, a toilet? The over-reliance on solar and wind saw many Germans nearly freeze to death during last year's winter as there was no sun nor was there any wind and they almost ran out of power. It's about a combination. There's no good turning your back on coal fired power stations, they are needed.
28 May 2014 3:50pmgunther s. from RWE
@ Dennis Rodman:
You're talking complete nonsense. It might be helpfull to check some more reliable sources of information on the 'Energiewende' here in Germany, rather than the pro-carbon propaganda of the Murdoch media empire..
Good luck, mate!
29 May 2014 4:56amBlair R from Reality
wrote: Well, Rod, that's a great story... except it never happened. The outage you probably are referring to, at Hannover - was caused by a malfunction at one of Germany's remaining COAL FIRED power plants. Look, if you want to keep investing in the fossil fuel industry go right ahead, but don't be surprised when your share portfolio takes a massive hit in the near future.
29 May 2014 9:42am