ODDO BHF Asset Management (ODDO BHF AM), the asset management arm of Franco-German financial group ODDO BHF, is excluding coal investments from sustainable portfolios.
The decision will impact nearly 12% of the firm’s assets, which is valued at €6.6bn.
Those affected include mining and power generation firms that use coal to produce over 5% and 30% of revenues, respectively.
In announcing the move, the firm cited International Energy Agency (IEA) data that found coal combustion accounting for nearly 30% of global carbon dioxide emissions.
The ultimate aim behind the initiative to cut coal investments is to fight global warming.
ODDO BHF AM CEO and co-CIO Nicolas Chaput calls the move the “third building block” of the firm’s environmental strategy.
ODDO BHF AM head of ESG research Nicolas Jacob said: “It’s increasingly clear that coal is also economically at a dead end.
“If the regulatory restrictions on CO2 emissions continue to tighten, most of the proven coal reserves will not be exploited, resulting in substantial financial losses of several hundred billion dollars.
“So, for an asset manager with fiduciary duties for long-term investors it makes sense to exclude coal from its investment universe.”
ODDO BHF AM focuses on European equities, quantitative strategies, fixed income, multi-asset solutions, private equity as well as private debt.
The firm has operations in Dusseldorf, Frankfurt, Paris, Luxembourg, Milan, Geneva, Stockholm, Madrid, Hong Kong, Abu Dhabi and Zurich.