M&G has joined the Powering Past Coal Alliance (PPCA) and intends to end investment in thermal coal by 2030 for developed countries and 2040 for emerging markets.
The PPCA comprises national and sub-national governments, businesses and organisations advancing the transition from unabated coal power generation to clean energy.
M&G said it will stop all investment in new coal mines and coal-fired plants, and exclude public companies that cannot commit to completing phasing out coal by 2030 for developed countries and 2040 for emerging markets. It hopes this will help it achieve its own commitment of being net zero by 2050.
See also: – Rolling stream of net-zero commitments
The firm said it will implement this approach in two phases: engaging with clients on its coal approach, completing the forward-looking qualitative screening, engaging with investee companies, and making changes to funds and mandates to prepare to go live; and from March next year, divesting in developed markets, with divestment in emerging markets following two years later.
Speaking at PPCA’s Global Summit, M&G CEO, John Foley, said: “An accelerated phase-out of coal is essential if we want to limit global warming and ensure a sustainable future for our planet. We are delighted to join the PPCA and fully support its work to encourage businesses, governments and other organisations to commit to a transition away from coal in the run up to COP26 later this year.”
Nigel Topping, COP26 high level climate action champion, added: “Phasing out thermal coal is a critical early step on the race to net zero. PPCA is a key part of the COP26 Energy Transition Campaign, and it is fantastic to see M&G making this commitment in response to attending the PPCA ministerial round table co-hosted by the UK and Canada.”
Missing the mark
However, climate finance NGO Reclaim Finance said the new coal exit policy misses the mark – the benefits of the new restriction rules are wiped out by the timeline for their implementation, leaving companies with coal expansion plans up to three years before divestment is enacted.
Lara Cuvelier, sustainable investment campaigner at Reclaim Finance, commented: “M&G’s total exposure to coal is $1.5bn, including holdings in NTPC, Sumitomo and POSCO, which are all involved in controversial new coal projects. It’s a shame M&G is still leaving up to three years to these companies, which are at the opposite of what is needed to start transitioning.
“On the same day as this announcement, UN secretary-general António Guterres called for all planned coal projects around the world to be cancelled to end the ‘deadly addiction’ to the most polluting fossil fuel. He said this should be done now, not in three years – M&G would do well to heed his advice.”