CTF Life eyes renewables bets to back new emission targets
Chow Tai Fook Life Insurance (CTF Life) is looking at renewable energy investments and rebalance investments as it seeks to lower the emissions intensity of power generation assets in its portfolio.
The move comes as the life insurer committed to science-based targets initiative (SBTi) in Hong Kong, a standard that guides companies to set emission reduction targets.
“We will invest in renewable energy-generating companies or projects with very low emission intensity, for example, utilising available decarbonisation or impact funds. This strategy will further contribute to reducing the average emission intensity within our investment portfolio,” Richard Chan, CTF Life's chief investment and asset liability management officer told AsianInvestor.
CTF Life’s emissions targets have been finalised and will be submitted for validation by SBTi, he added.
POWER FOCUS
To cut Scope 3 emissions - emissions that are indirectly attributed to investments - CTF Life will explore options to reduce the emission intensity of investments in the power generation sector, according to Chan.
The company will also actively manage and rebalance investment holdings in power generation, prioritising those with credible decarbonisation targets based on SBTi guidelines, said Chan, who is also an Editorial Advisory Board member of AsianInvestor.
He said that engagement with investee companies will also be stepped up via proxy voting to facilitate their climate policies and decarbonisation strategies.
“We will also indirectly collaborate with asset managers to encourage the establishment of effective decarbonisation pathways," he said.
"This initiative aims to increase the number of companies in our investment universe that can assist us in meeting our emission reduction targets."
CTF Life’s carbon reduction targets will also encompass its direct emissions, which are counted as Scope 1 emissions, and emissions related to its electricity consumption - Scope 2 emissions.
Apart from investments in power, CTF Life has also invested more than $493 million in ESG bonds and decarbonisation impact funds that focused on Asia.
The life insurer managed an investment portfolio of about $10.55 billion, with 78% in bonds, 9% in equities and 5% in alternative assets as of end-2023.
As of June 2024, the insurer had reduced the carbon footprint of its investment portfolio by more than 15% from June 2023 levels.
SMALL LIST
Globally, a total of 6,545 companies have been validated by SBTi for their emission targets.
Until CTF Life, only two financial institutions from Hong Kong were in that list, according to the latest data from the climate target group.
Hong Kong-based AIA Group in 2021 signed up to the standard while announcing a net-zero pledge by 2050.
AIA’s climate transition plans with validated targets - including a target to reduce emissions intensity by 49.3% in power-generation-related investments - were published in 2023.
Taking the ESG aspects of the life insurer’s investment into the next level is one of two key areas of responsibilities to the investment chief, Chan told AsianInvestor previously.
Hong Kong-based CTF Life was previously known as FTLife Insurance Company.
In July, it was rebranded in a move to demonstrate the commitment of its parent company Chow Tai Fook Group and its owner Cheng Yu-tung family. The Cheng family acquired the life insurance business through its subsidiary NWS Holdings in 2019.