Asset manager Candriam is extending its thermal coal and tobacco exclusions policy to all its assets under management, it announced today.

The exclusions had already been in place for socially responsible-invested (SRI) assets, but would now be applied to the full scope of its assets under management. This would take in all funds and segregated mandates, a spokesman noted.

As of the end of June, Candriam has €113bn of assets under management across active, smart-beta, indexed and alternative strategies.

The asset manager, which is a subsidiary of New York Life Company, indicated it would also be fully divesting from companies that produce chemical, biological and white phosphorous weapons.

Divestments triggered by the new measure would be implemented by the end of this year, according to the manager.

Companies with an “exposure level” of more than 10% to thermal coal will be affected by the exclusion, which the spokesman noted was a stricter criterion than that set by many other investors. The asset manager would ban all companies launching new coal projects.

The exclusion of tobacco targeted both manufacturers and their suppliers, it said.

Naïm Abou-Jaoudé, CEO of Candriam and chairman of New York Life Investment Management, said: “Coal is the most polluting energy source and the first stranded asset in an energy transition pathway, while the harmful effects of tobacco are increasingly exposed.

“We recognise the important role asset managers play in tackling major global issues such as health and climate.”

Vincent Hamelink, Candriam’s chief investment officer, added “health, social and environmental costs are key in a risk-return analysis”.

“Extending our divestment strategy to our mainstream funds is a logical next step as investments in these companies are increasingly incompatible with our long-term risk/return objectives and our sustainability targets”.

Candriam’s announcement coincides with a climate summit and the annual responsible investment conference of the Principles for Responsible Investment (PRI) in San Francisco this week.

Fossil fuel divestment on the rise

According to a report from philanthropy and impact investing firm Arabella Advisors, nearly 1,000 institutional investors with $6trn (€5trn) in assets have committed to divesting from fossil fuels, up from $52bn four years ago.

Released ahead of the climate summit, the report said the recent growth was primarily driven by insurers, pension funds and sovereign wealth funds.

The growing success of the divestment movement had accelerated in recent years because of “the intersection of ethical, financial and fiduciary imperatives to divest and invest,” it said.

The report can be found here.

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