in its new ESG report, AIA, the biggest life insurer in Asia, has committed to fully divest from coal.  

In its new 2020 ESG report, AIA has said it will divest and/or run off their entire directly managed equity and fixed income exposure to coal mining and coal-fired power businesses( by the end of 2021 for equity and 2028 for fixed income).

AIA will not permit any new investments within businesses involved directly in either mining coal or generating electricity from coal.AIA has stated that it made its new commitments “in support of sustainability in our markets, and the health and well-being of our customers and communities”. 

While, in an earlier announcement, AIA limited divestment to companies which derive at least 30% of their revenue from coal, it said  that the new approach is applied to all coal companies “regardless of revenue and coal capacity”.

Through its “AIA Kick Out Coal” campaign, the Insure Our Future network has called on AIA to divest from coal since November 2020. 

Minyoung Shin, Sustainable Finance Adviser to the Insure Our Future campaign, said: “The pollution, climate destruction and premature death caused by the coal industry are in direct contradiction to the mission of life insurance companies. We welcome AIA’s stance on coal investments and ask it to stand by the commitment to offer full disclosure and accountability of its divestment progress and urge other Asian life insurers to follow suit.''

Lucie Pinson, executive director of Reclaim Finance, asked AIA to clarify how it defines the coal companies it divests from.

“If the approach is as comprehensive as it sounds, we will celebrate it as a bold signal to Asian institutional investors.Coal constitutes a plague for the climate and for public health – it's high time for Asian financial institutions to catch up with their international peers, ditch coal and drive the transition towards a sustainable future," Pinson added.

Other major Asian life insurance companies which need to divest from coal include the Life Insurance Corporation of India, Ping An, Samsung Life, Great Eastern, Thai Life and Cathay, Nanshan and Fubon Life in Taiwan. 

Several Korean life insurance companies have divested from coal in recent months, and large Japanese life insurers have ended new support for coal projects but have not divested their current coal assets.

Sejong Yun, Solutions For Our Climate, said: "AIA sets a good example for how Korean insurance companies can improve their coal policy.

Korean insurers have only committed to "no new coal," which has little impact as few coal projects are remaining in the pipeline. Korean insurers must begin addressing their existing exposure in equity and fixed income assets and set a clear path for coal divestment."