Dutch asset manager Robeco is ditching from its mutual funds companies that generate revenues from fossil fuels, as part of its sustainable investing approach.
The exclusion covers investment in thermal coal, oil sands, and Arctic drilling.
Robeco will now exclude companies that generate at least 25% of their revenues from thermal coal or oil sands, or at least 10% of their revenues from Arctic drilling.
Client-specific funds and mandates are exempted from the exclusion.
The company intends to complete the process by the final quarter of this year.
The latest move expands the thermal coal exclusion policy that affects the firm’s most sustainable and impact strategies.
The firm believes that that thermal coal is the highest carbon-emitting energy source in the global fuel mix.
It calls oil sands among the “most carbon-intensive means of crude oil production”.
Robeco further said that the chance of spill risk is higher in case of Arctic drilling than conventional oil and gas exploration.
Robeco CIO Fixed Income and Sustainability Victor Verberk said: “Our move to exclude investments in fossil fuels from our funds is a further step in our efforts to lower the carbon footprint of our investments, transitioning to a lower carbon economy.
“As global leader in sustainable investing we are committed to the Paris agreement, which aims to limit the rise in global temperatures to well below 2 °C.
“This will require substantial reductions in global greenhouse gas emissions over the next few decades.”
In June this year, private bank Coutts revealed plans to bring about a 25% reduction in carbon emissions in its funds and portfolios by 2021.
A month later, Australian superannuation fund First State Super unveiled plans to divest from thermal coal by October this year.
Earlier this year, Pictet said that it will end fossil fuel exposure.
In October 2019, Lyxor Asset Management said that it will divest from the coal sector as part of its new climate policy.
Last May, ODDO BHF Asset Management said that it will exclude coal investments from sustainable portfolios.