Investors with assets totalling $3.6 trillion are writing to sponsors and financiers to urge them to withdraw from Vietnam’s VungAng 2 coal-power station project. The investors say that the projects is incompatible with Paris agreement goals on reducing emissions. The action highlights a shift in strategy among shareholders concerned about the impact of climate change. With this shift, they aren’t refraining from selling their coal-mining and power company shares to pressuring associated banks and contractors.
The letter being sent to Vung-Ang on thursday is written by Nordea Asset Management’s head of responsible investment, Eric Pedersen. This letter is also backed by other investors including the Church of Sweden and Brunel Pension Partnership.
“Vung Ang 2 is fast becoming the prime exhibit in the case against companies taking on irresponsible transition risk on coal plants, not to mention the obvious conflict with the commitments of those same companies to align with the Paris agreement,” Pedersen said in a statement.
Nordea said it holds shares worth nearly $474 million in the publicly listed members of the consortium building the project. Other members of the investor group did not outline their specific exposure. Meanwhile, 1.2 GW Vung Ang project is one of a number of coal power stations under construction in Southeast Asia. This project is being built to meet Vietnam’s surging demand for power, with the support from Japanese and Vietnamese governments.
