An investment firm is to divest from companies which rely on coal for more than half of their revenue.

AXA Investment Managers (AXA IM) yesterday announced its intention to step away from investments in coal-intensive areas in a move to better prepare itself for the transition to a low carbon economy.

The firm, which refers to itself as “a responsible investor and active steward” of assets, believes it will help to de-risk portfolios by decreasing exposure to assets that are likely to become ‘stranded’ as the world moves towards the Paris Agreement’s 2°C scenario.

It says investors have an important role to play in helping the global transition to a low carbon economy.

The company suggests it is important to engage with clients, increase awareness about the potential risks related to coal and encourage investors to fully consider the long term benefits of low carbon portfolios.

Matt Christensen, Global Head of Responsible Investment at AXA IM, said: “We believe that following COP21, the ratification of the Paris Agreement and growing momentum for fossil fuel divestment globally, now is the right time for AXA IM to make this move sending a strong message to the rest of our industry.”