A consortium of investors including Nordea Asset Management (NAM) has signed a letter to financial institutions and companies involved in the construction of the coal plant Vung Ang 2 in Vietnam.
The Vung Ang 2 coal-fired power plant is planning the construction of a site next to plants which have already caused major environmental pollution. 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.
Nordea Asset Management is leading 21 investors representing EUR 4.7tn in AuM.
The consortium 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.
Nordea Asset Management is committed to continuing its engagement activities concerning the Vung Ang 2 project in line with Nordea’s sustainability commitments and policies, and is urging other investors to make similar commitments to end involvement in new coal projects.