The pan-European asset manager said in a statement it will implement its controversial activities exclusion across its active smart beta, index and alternative strategies, which account for €113bn of assets under management (AUM).
Candriam has been running an exclusion policy for almost 20 years across its pure socially responsible investment (SRI) assets, which currently account for €30bn AUM.
Now it will exclude from its mainstream range of funds companies that derive more than 10% of their energy from thermal coal and ban companies that launch new coal projects. It will also exclude tobacco manufacturers and suppliers.
It will also exclude manufacturers of chemical, biological and white phosphorus weapons.
Candriam chief executive Naïm Abou-Jaoudé said: “Coal is the most polluting energy source and the first stranded asset in an energy transition pathway, while the harmful effects of tobacco are increasingly exposed”.
“We recognise the important role asset managers play in tackling major global issues such as health and climate,” he said.
The firm said the exclusion of thermal coal was based on an exposure level, both direct and indirect, of maximum 10%, and that it would ban on all companies launching new coal products.
Candriam chief investment officer of investment management, Vincent Hamelink, said extending their divestment strategy to the mainstream funds was a logical next step.
“Investments in these companies are increasingly incompatible with our long-term risk/return objectives and our sustainability targets,” he said.