Another big investor has decided to reduce its exposure to fossil fuels, with AMP Capital announcing that its ‘‘responsible’’ funds would have limited scope to invest in certain mining and energy companies.
The changes will see 56 companies ruled out of bounds for the funds, and see the affected industries grouped with pornographers, weapons manufacturers, gaming companies, uranium miners, and producers of alcohol and tobacco.
In a move that follows bans by several church funds and banks in northern Europe, AMP said the changes were in response to ‘‘growing interest and concern’’ about climate change from investors.
Funds operated by AMP for ‘‘Responsible Investment Leaders’’ will no longer invest in companies that derive more than 20 per cent of their earnings from thermal coal, coal-fired power generation, oil sands and the conversion of coal to liquid fuels.
The ‘‘responsible’’ funds manage about $3 billion and represent about 2 per cent of all funds under management by AMP.
The 20 per cent limit means two of Australia’s biggest coal miners, BHP Billiton and Rio Tinto, could still be included in the fund because their biggest exposures lie in other commodities
Oil and gas producers like Woodside Petroleum would also be allowed in the fund, as conventional forms of oil and gas are not excluded.
AMP’s head of environmental, social and governance research Ian Woods said producers of conventional oil and gas and coking coal would still be investible as there were no viable alternatives to those commodities in the transport and steel sectors respectively.
But Mr Woods did note that an ethics committee would continue reviewing the policy, and the limits could become stricter in the future.
‘‘This is seen as a positive first stage,’’ he said.
