Allianz is the latest insurer to bank on carbon neutrality
Changing regulations and cleaner technologies are leading the divestment from coal power plants and mines.
Allianz is to stop selling insurance policies to coal-fired power plants and coal mines, in the latest sign the dirtiest fossil fuel could become a pariah for forward-thinking investors.
Announcing its "climate protection package" last week, the German insurance giant said the new policy would become effective immediately, acting as the first step towards the firm's complete withdrawal from the coal business by 2040.
Allianz also said it gradually will stop investing in companies that fail to reduce their carbon emissions in line with the 2-degree trajectory agreed under the Paris Agreement, as part of a long-term goal to ensure all its tradeable investments in carbon-intensive sectors are "climate-neutral."
It promised to immediately stop investing in energy companies that "put the 2-degree target at risk" by extensively building coal-fired power plants.
The announcements strengthen Allianz's existing coal divestment policy, which was announced in 2015.
"Climate change generates enormous economic and social risks. It is already harming millions of people today," Allianz SE CEO Oliver Bäte said. "As a leading insurer and investor, we want to promote the transition to a climate-friendly economy."
Allianz said its approach will help to secure the investment premiums of its other insurance customers, as well as support the wider low-carbon transition.
"As a long-term investor, we want to shape the change to a climate-friendly economy together with our clients," said Dr. Günther Thallinger, member of the Board of Management of Allianz SE. "We will thus also strategically develop our investment opportunities in new technologies."
Campaigners welcomed the move. "The coal industry is the No. 1 driver of climate change, and building new coal plants is incompatible with the goals of the Paris Agreement," Heffa Schuecking, executive director of the German environment and human rights organization Urgewald, said in a statement. "We welcome Allianz's move as an important step towards making the coal industry uninsurable and uninvestable."
Allianz also announced it is joining the Science-Based Target (SBT) initiative, and by the end of the year will set a carbon reduction goal for its own operations to ensure it aligns with a 2-degree trajectory across all its business activities.
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