AIA coal investments undermine pledges to support climate action and health

Logo is a “stain” on the shirts of climate champions Tottenham Hotspur

25 November, Hong Kong: AIA, one of the world’s largest life insurers and shirt sponsor of Tottenham Hotspur, is undermining its pledge to support climate action and help customers lead healthy lives by investing billions of dollars in coal companies, reveals a report published today by the Insure Our Future campaign and SumOfUs.

More than 65 insurers worldwide have divested from coal, but AIA has placed no restrictions on its US$200 billion portfolio.[1] Its coal investments include: $125 million of shares in Tenaga Nasional Berhad, which operates more than 26,000 MW of power plants in Malaysia and other countries, more than half of it coal capacity; and a $21 million loan for the Toledo coal power plant in Cebu, in the Phillippines, reveals the report AIA Kick Out Coal!

Hong Kong-based AIA has customers in 18 Asia-Pacific countries and regions and its website commits to helping them lead “healthier, longer, better lives”. Yet coal pollution affects the health of millions and is responsible for more than 800,000 premature deaths every year, including 670,000 in China alone.

AIA claims to support the Paris Agreement, yet coal is the biggest single source of CO2 emissions, and a warming world is already increasing the frequency and intensity of extreme weather events. Record floods, typhoons and wildfires have affected people, ecosystems and economies in many parts of the Asia-Pacific only this year.

Peter Bosshard, international coordinator of the Insure Our Future campaign, said: “Coal is AIA’s dirty little secret. AIA talks a good game on climate change but its investments undermine the Paris climate targets and threaten the health and livelihoods of its customers. Until it kicks out all coal, AIA’s logo will be a stain on the shirts of Tottenham Hotspur, a climate champion in the global football community.”

UN Secretary General Antόnio Guterres has called for an end to the construction of new coal projects. Coal accounts for 40% of global CO2 emissions (other than from land-use changes), and the Intergovernmental Panel on Climate Change has shown that coal power needs to be phased out swiftly for any chance of limiting global warming to 1.5°C.

AIA is one of 20 insurers that have joined the Climate Action 100+ investor group that pressures fossil fuel producers and other companies to cut emissions in line with the Paris target of limiting global warming to well below 2°C. It is the only insurer in this group that has not divested from coal or adopted restrictions on new coal investments, apart from two small local companies.

AIA’s coal investments are reflected in the carbon emissions of its equity portfolio. Dollar for dollar, the average emissions of the companies AIA holds shares in are nearly 50% higher than those of equity portfolios held by its peers – companies considered leaders in environmental and social governance (ESG) in emerging markets.

Research for Insure Our Future indicates that AIA holds at least $3 billion and most likely $6 billion in bonds and equities of coal power utilities and loans to coal projects.

Emma Ruby-Sachs, executive director of SumOfUs, said: “AIA’s continued investment in the mining and buring of coal contradicts its brand promise and sets it apart from the ESG leaders in the global insurance industry. There is no greater irony than a life insurer profiting from destroying our planet. AIA has divested from the dirty sectors of tobacco and ammunition, now the coal sector must follow.”

End it like Beckham

AIA has put its healthy lifestyle brand before a global audience as the shirt sponsor of Tottenham Hotspur, the London football club which reached the finals of the 2019 UEFA Champions League. The team’s Korean top scorer Son Heung-Min is one of the most popular athletes in Asia. AIA has also engaged former England football captain David Beckham as its global brand ambassador.

However, AIA’s continuing support for coal is at odds with Tottenham’s record as a leader on climate action within the football world, going back more than 10 years, and Beckham’s campaigning on the issue. In October, Spurs became a founding member of Count Us In, a global initiative aiming to mobilise a billion people to act on climate change. One of the steps the campaign advocates is to “Choose financial institutions and funds that invest responsibly.”

Peter Bosshard said: “What will David Beckham and Spurs do when they find out about AIA’s ongoing support for the coal industry? Will Spurs have to call on their fans to shift their insurance policies away from their main sponsor AIA?”

Divesting from coal makes good business sense. German insurance giant Allianz divested in November 2015, and each year since then the Dow Jones US Coal Index has on average lost more than 25% of its value. In the same period the S&P 500 gained an average of 11% a year.

Asian insurers are known to be considering coal policies, and recent weeks have seen Korean insurers Samsung Fire & Marine and Samsung Life announce coal divestments, although they have yet to release details.

The report calls on AIA’s new CEO Lee Yuan Siong to align the company’s investments with its climate commitments, but it warns: “If and when AIA divests from coal, it needs to do so without any exceptions. Simply divesting from companies which depend on coal for more than 30% of their revenues would allow AIA to continue investing in 188 companies with a combined coal power capacity of 527,500 megawatt – more than a quarter of the world’s current coal fleet.

“It would also allow the insurer to continue investing in 166 companies which still plan to build 223,600 megawatt of new coal projects – three times the current coal capacity of the U.S. If AIA exempted projects which are included in host governments’ climate plans, it could likewise still finance scores of new projects which violate the Paris Agreement.”

Read more about Insure Our Future and SumOfUs.