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.
We invite you to watch our latest video featuring Zurich Investments senior investment strategist Patrick Noble.
The question of how to generate a satisfactory return to meet investors' needs is becoming ... Watch video
With an 8-14% per annum return objective over the long term, the Pengana PanAgora Absolute Return Global Equities Fund is clearly managed by a team with investment acumen and a well thought out process.
Broadly ... Watch video
Buy low, sell high. It's a simple refrain but one so often forgotten. And not just by inexperienced retail investors with online broking accounts but by the professional investing community as well.
The ... Watch video
We invite you to watch our latest video featuring Bell Direct chief executive officer Arnie Selvarajah.
In the video and accompanying article he explains how easily the increasing number of advisers using ... Watch video
Financial Standard editor Mark Smith presents a roundup of the week's biggest industry news and executive appointments. In this week's news:
Macquarie to face court over van Eyk role
Macquarie Investment ... Watch video
We invite you to watch our latest video featuring Reece Birtles, chief investment officer of Legg Mason affiliate Martin Currie Australia.
Amid volatile markets, treacherously low term deposit rates and ... Watch video
Get it Daily
FREE to your inbox, get the Financial Standard Daily Email.