Allianz pulls support from coal in new climate strategy
Global insurance company, Allianz, has announced it will no longer provide insurance to single coal-fired power plants and all planned and operating coal mines, effective immediately.
Allianz announced the changes in a corporate statement expanding its climate strategy to support a low-carbon economy.
“By 2040, in a step by step process, Allianz will have phased out both its proprietary investments in coal-based business and its insurance coverage of such risks. In addition, the company will reduce the carbon footprint of its business operations by 2040, for example through a higher proportion of renewable energies in electricity purchase.”
Allianz said the stated aim of its climate strategy was to ensure the integration of the two-degree target in all of the Allianz Group’s relevant business activities.
“Together with partners from science, civil society and economy within the non-profit Science Based Target initiative (SBTi), Allianz will develop the underlying methods and targets by the end of the year. This builds on the company’s well-established ESG (Environment-Social-Governance) approach.”
Allianz is financing and providing insurance to renewable energy companies and aiming to structure its tradable investments in all carbon intensive sectors so as to be climate-neutral.
“Companies that do not succeed in adjusting their greenhouse gas emissions to the two-degree target over the coming decades will be gradually removed from the portfolio. This will be implemented for example by active dialogue with the companies and by requests for long-term climate protection targets, similar to the ESG scoring approach, which is already applied to companies with high ESG risks.”
Dr. Günther Thallinger, member of the Board of Management of Allianz SE and responsible for investments and ESG said the company believed its approach “will further improve the risk/return profile of our portfolio in the long term.”
“As a long-term investor, we want to shape the change to a climate-friendly economy together with our clients. We will thus also strategically develop our investment opportunities in new technologies.”
Additionally, the threshold value in the energy sector for the maximum share of coal used by the emitters that Allianz finances will be successively lowered in five percent steps from currently thirty percent to zero by 2040. The threshold relates to the revenue that is generated by a mining company by mining coal or to the percentage of electricity generated from coal by energy companies. The next adjustment will take place within the next five years. With immediate effect, Allianz will no longer invest in energy companies that put the two-degree target at risk by extensively building coal-fired power plants.
In Property and Casualty insurance, with immediate effect, Allianz will no longer provide insurance to single coal-fired power plants or coal mines, that are operational or planned. Companies that generate electricity from multiple sources, such as coal, other fossil fuels or renewable energies, will continue to be insured, and individually reviewed on the basis of defined ESG criteria. However, Allianz’s stated goal is to completely phase out coal risks in the insurance business by 2040.