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AIA sells almost US$10 billion of coal-related investments as companies rush to sever ties with the fuel in their bid to go green

  • 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
  • AIA will no longer invest in any business directly involved in coal mining or generating electricity from coal

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The chimney of a coal-fired power plant stands behind a lion statue in Shanghai on October 21, 2021. Photo: Reuters
Bloomberg
AIA Group has sold 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.
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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. It said it won’t make new investments in businesses directly involved in coal mining or generating electricity from coal.

“The area that we can make the biggest contribution and the biggest impact is really through our investments,” Chief Executive Officer Lee Yuan Siong said in an interview in Hong Kong. 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.

The shirt sponsor of Tottenham Hotspur had come under pressure to sell its investments in coal. 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 are 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.

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