LUXEMBOURG, LU — The collaborative engagement against the construction of Vung Ang 2 coal-fired power plant in Vietnam, initiated and led by Nordea Asset Management (NAM), has been shortlisted for the 2021 PRI Award for Stewardship Initiative of the Year.
On 22 October 2020, NAM led a consortium of 25 investors representing EUR 4.8tn in AuM in sending a letter to owners, financiers and constructors of Vung Ang 2, a new coal-fired power plant in Vietnam. The letter urged companies to withdraw from the project and to end all forms of involvement in new coal projects worldwide, citing the associated climate- related financial and reputational risks. Moreover, the letter stressed the important role that listed companies play in addressing climate change, as well as the risk they pass along to investors when failing to address climate risk exposure.
In addition to the signed letter, NAM and its collaborators followed up with direct, individual dialogues with companies associated with Vung Ang 2. Shareholder pressure like ours has played a key role in Samsung C&T’s commitment to withdraw from all future coal projects and exit the coal industry. KEPCO, Mitsubishi Corporation and Sumitomo Mitsui Financial Group have also announced plans to end future coal projects. In addition, Mitsubishi Corporation has announced they are withdrawing from the sister project of Vung Ang 2, Vinh Tan 3. The engagement was also cited by pro-climate members of Korea’s parliament during a climate debate which ultimately led to the Korean government’s decision to announce a net zero target for emissions.
NAM is determined to continue to urge the companies involved in Vung Ang 2 to withdraw from the construction project and commit to end their involvement in new coal projects, in line with the recommendation of the United Nations Secretary General. “Vung Ang 2 is fast becoming the prime exhibit in the case against companies taking on transition risk on coal plants, not to mention the obvious conflict with the commitments of those same companies to align with the Paris agreement,” said Eric Pedersen, Head of Responsible Investments at Nordea Asset Management.
Nordea Asset Management is the functional name of the asset management business conducted by the legal entities Nordea Investment Funds S.A. and Nordea Investment Management AB (“the Legal Entities”) and their branches and subsidiaries. This document is advertising material and is intended to provide the reader with information on Nordea’s specific capabilities. This document (or any views or opinions expressed in this document) does not amount to an investment advice nor does it constitute a recommendation to invest in any financial product, investment structure or instrument, to enter into or unwind any transaction or to participate in any particular trading strategy. This document is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instruments or to participate to any such trading strategy. Any such offering may be made only by an Offering Memorandum, or any similar contractual arrangement. Consequently, the information contained herein will be superseded in its entirety by such Offering Memorandum or contractual arrangement in its final form. Any investment decision should therefore only be based on the final legal documentation, without limitation and if applicable, Offering Memorandum, contractual arrangement, any relevant prospectus and the latest Key Investor Information Document (where applicable) relating to the investment. The appropriateness of an investment or strategy will depend on an investor’s full circumstances and objectives. Nordea Investment Management AB recommends that investors independently evaluate particular investments and strategies as well as encourages investors to seek the advice of independent financial advisors when deemed relevant by the investor. Any products, securities, instruments or strategies discussed in this document may not be suitable for all investors. This document contains information which has been taken from a number of sources. While the information herein is considered to be correct, no representation or warranty can be given on the ultimate accuracy or completeness of such information and investors may use further sources to form a well-informed investment decision. Prospective investors or counterparties should discuss with their professional tax, legal, accounting and other adviser(s) with regards to the potential effect of any investment that they may enter into, including the possible risks and benefits of such investment. Prospective investors or counterparties should also fully understand the potential investment and ascertain that they have made an independent assessment of the appropriateness of such potential investment, based solely on their own intentions and ambitions. Investments in derivative and foreign exchange related transactions may be subject to significant fluctuations which may affect the value of an investment. Investments in Emerging Markets involve a higher element of risk. The value of the investment can greatly fluctuate and cannot be ensured. Investments in equity and debt instruments issued by banks could bear the risk of being subject to the bail-in mechanism (meaning that equity and debt instruments could be written down in order to ensure that most unsecured creditors of an institution bear appropriate losses) as foreseen in EU Directive 2014/59/EU. Nordea Asset Management has decided to bear the cost for research, i.e. such cost is covered by existing fee arrangements (Management-/Administration-Fee). Published and created by the Legal Entities adherent to Nordea Asset Management. The Legal Entities are licensed and supervised by the Financial Supervisory Authority in Sweden and Luxembourg respectively. A summary of investor rights is available in English through the following link: https://www.nordea.lu/documents/engagement-policy/EP_eng_INT.pdf/. The Legal Entities’ branches and subsidiaries are licensed as well as regulated by their local financial supervisory authority in their respective country of domiciliation. Source (unless otherwise stated): Nordea Investment Funds S.A. Unless otherwise stated, all views expressed are those of the Legal Entities adherent to Nordea Asset Management and any of the Legal Entities’ branches and subsidiaries. This document may not be reproduced or circulated without prior permission. Reference to companies or other investments mentioned within this document should not be construed as a recommendation to the investor to buy or sell the same but is included for the purpose of illustration. The level of tax benefits and liabilities will depend on individual circumstances and may be subject to change in the future. © The Legal Entities adherent to Nordea Asset Management and any of the Legal Entities’ branches and/or subsidiaries.