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.