Nordea Asset Management leads engagement against coal power construction in Vietnam
A consortium of 22 investors led by Nordea Asset Management (NAM), representing EUR4.7 trilion in assets under management, has sent a letter to financial institutions and companies involved in the construction of Vung Ang 2 – a coal plant in Vietnam.
The Vung Ang 2 coal-fired power plant will further expand development of a site proximate to plants that have already caused major environmental pollution accidents in the area – including spilling toxic chemicals into the ocean, devastating the coastline and marine life. The Vung Ang 1 plant has also faced controversies due to the proximity of its coal ash heap to residential areas and farmland.
“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,” says Eric Pedersen, Head of Responsible Investments at Nordea Asset Management.
The consortium of investors sent a letter on 22 October, urging companies associated with Vung Ang 2 to withdraw from the project, citing the high climate-related financial and reputational risks associated with the project. The letter stresses the important role listed companies play in addressing climate change, as well as the risk they pass along to investors when failing to address climate risk exposure.
NAM is committed to continuing its engagement activities concerning the Vung Ang 2 project and is urging investors to make commitments to end involvement in new coal projects in keeping with the recommendation of the United Nations Secretary General.