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Climate protection to become a core business for Allianz SE


November 26, 2015   by Canadian Underwriter


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Allianz SE plans to integrate climate protection into its entire business portfolio – a move that will include ending financing of coal-based business models – the insurer announced in the run-up to the UN Climate Change Conference in Paris.

Allianz to integrate climate protection into entire business portfolio

“Our knowledge of risk, financial resilience and long-term investments enable us to offer effective support for climate protection while making the most of long-term opportunities for our customers,” Oliver Bäte, CEO of Allianz SE, says in a press release issued Thursday by the world’s largest global insurer.

Bäte will introduce the following four measures (three NGOs – Germanwatch, Transparency International and WWF – have been involved to develop and implement the measures) as part of the new strategy:

  • transparency across entire investment portfolio – Allianz investments will be analyzed across the entire portfolio using 37 environmental, social and corporate governance criteria, including greenhouse gas emissions, energy efficiency, data protection and corruption (transparency across the entire portfolio will be achieved by mid-2016, enabling a more targeted management of risks and opportunities);
  • phasing out coal – the insurer will no longer invest in companies that derive more than 30% of revenue from coal mining or generate over 30% of their energy from coal (equities amounting to 225 million euros will be divested by March 2016 while bonds amounting to 3.9 billion euros will be expiring);.
  • insuring climate risks in developing countries – already a micro-insurer, as part of the Munich Climate Insurance Initiative, the company is among the insurers designing new climate insurance approaches for more than 400 million people in developing countries; and
  • financing a low-carbon economy – by 2035, annual investments required for the move to alternative energy sources will have risen from the current value of US$380 billion to US$780 billion, and Allianz has more than 2.5 billion euros committed to renewable energy.

Oliver Bäte

“In the medium-term, we want to at least double our investments,” says Bäte [pictured left]. “Given unequivocally positive signals and reliable framework conditions for long-term investors, climate protection is unlikely to fail because of a lack of funding.”

With regard to the investment portfolio transparency, Andreas Gruber, chief investor of Allianz, notes that “it is becoming increasingly important to take environmental and social risks into consideration early on. With our new approach, we can achieve greater transparency and ensure that our investment strategy will become even more sustainable in the future.”

Christoph Bals, Germanwatch’s executive director for policy, notes in the Allianz statement that, among other things, the moves announced by the insurer “is signaling another important phenomenon, namely the beginning of the ‘twilight time for coal’ all around the world.”

Caspar von Hauenschild, a member of the Board of Management of Transparency International, suggests in the press release that “the fact that Allianz is implementing ESG scoring for over 600 million euros of its own investments is a strong anchor for the global capital market in turbulent times.”

And Matthias Kopp, team leader of WWF’s Sustainable Finance team, says “moving away from coal-based business models that lack transformation potential and improving the transparency of the sustainability elements in portfolios” are essential first steps.

“The next step will be setting a specific level of ambition for managing the Allianz investment business; for example in line with the transition to a low-emission economy, which will also serve as a yardstick against which to measure success and impact. This challenge is faced by pretty much the entire financial industry,” Kopp maintains.


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