Effective immediately, global insurance giant Allianz is no longer insuring single coal-fired power plants and coalmines. Investments in coal-based business models will also be phased out by 2040.
One of the world’s largest insurance groups is saying farewell to the coal business. Allianz Group announced last week that it will no longer provide property and casualty insurance to single coal-fired power plants or coal mines. Companies that generate electricity from multiple sources, such as coal, other fossil fuels or renewable energies, will be reviewed individually on the basis of defined ESG criteria.
Allianz also intends to gradually phase out coal from its investment portfolio and will step-by-step lower the threshold value in the energy sector for the maximum share of coal used by the emitters it finances in five per cent steps from the current thirty per cent to zero by 2040.
In addition, the insurance group is joining the non-profit Science Based Target Initiative, which was founded by the Carbon Disclosure Project, UN Global Compact and WWF. Its aim is to support companies from over 45 industries and in all regions of the world set emission reduction targets that are in line with achieving international climate targets.
The announcement is part of its strategy to actively support the global change to a low-carbon economy over the coming decades. Allianz is one of the first insurance companies to set itself long-term climate goals linked to the two-degree target of the Paris Climate Agreement.
“Climate change generates enormous economic and social risks. It is already harming millions of people today,” said Allianz CEO Oliver Bäte. “As a leading insurer and investor, we want to promote the transition to a climate-friendly economy.”
Allianz believes that its gradual withdrawal from coal investments will encourage the companies its finances to move away from fossil fuel energy.
“As a long-term investor, we want to shape the change to a climate-friendly economy together with our clients,” said Günther Thallinger, member of the Allianz board of management responsible for investments and ESG. “We will thus also strategically develop our investment opportunities in new technologies.”
Image credit: Allianz