Three of the world’s biggest financial institutions — the World Bank, ING, and AXA — have all announced this week on the sidelines of the One Planet Summit in France plans to divest from fossil fuels including coal, oil, and gas.
The global divestment movement has been one of the most interesting developments to watch of the last decade, as institutions of all stripes from around the world have looked at their investments in the fossil fuel industry and realized one of two things — either it makes no financial sense anymore to continue investing in an industry which is actively being phased out around the world, or that continuing to invest in fossil fuel energy is only harming the planet for future generations. Importantly, many companies and institutions that are announcing big divestment targets are realizing that the risk of both stranded assets and harmful impacts on the environment are worth acting on.
This week, on the sidelines of the One Planet Summit being held in France and hosted by French President Emmanuel Macron, three of the world’s leading financial institutions have individually announced their own fossil fuel divestment targets.
Actually attending the One Planet Summit, World Bank Group President Jim Yong Kim announced that the World Bank would cease financing upstream oil and gas after 2019. The announcement is one of five made by the World Bank at the Summit in line with its ongoing support to aid developing countries effectively implement the goals of the Paris Climate Agreement.
Separately, Dutch multinational bank ING similarly announced its intention to reduce the company’s exposure to coal power generation down to close to zero by 2025. Specifically, by the end of 2025 ING will no longer finance clients in the utilities sector that are over 5% on coal-fired power in their energy mix — though they will continue to finance non-coal energy projects for these clients as they seek to transition away from coal. Further, and more immediately, ING will only support new clients from today onward if their reliance on coal is 10% or less and if they have a strategy to reduce their coal percentage to close to zero by 2025. ING will also phase out lending to individual coal-fired power plants by the end of 2025.
“We realise that contributing to the Paris Agreement targets is also about making clear choices in what we’ll no longer finance, especially when there are good alternatives available,” said ING Vice Chairman Koos Timmermans. “We are taking this decisive step as part of our overall ambition to support the energy transition.”
Back in May of 2015, AXA announced that it would divest from €500 million worth of coal assets by ending investments into companies which derive over 50% of their revenue from coal. This week, AXA has decided to increase its divestment five-fold to €2.4 billion by divesting from companies which derive 30% of their revenue from coal, have a coal-based energy mix that exceeds 30%, actively builds new coal plants, or produces more than 20 million tonnes of coal per year. AXA also announced that they would divest over €700 million from the main oil sands producers and associated pipelines, and discontinuation of further investments in these businesses.
Additionally, AXA announced back in 2015 a commitment to reach €3 billion in green investments by 2020. Considering that AXA already reached this target, the group has decided to quadruple its original target and aim for €12 billion by 2020.
“A +4°C world is not insurable,” explained Thomas Buberl, Chief Executive Officer of AXA. “As a global insurer and investor, we know that we have a key role to play. We have made some pioneering moves since 2015, notably by starting to divest from coal, setting an ambitious green investments target, and restricting our insurance business with the coal industry. We are proud to have taken these decisions and to have inspired other actors. Today, in the spirit of the Paris Agreement, we want to accelerate our commitment and confirm our leadership in the fight against global warming.”
Have a tip for CleanTechnica? Want to advertise? Want to suggest a guest for our CleanTech Talk podcast? Contact us here.
CleanTechnica Holiday Wish Book
Our Latest EVObsession Video
CleanTechnica uses affiliate links. See our policy here.