Allianz has unveiled news plans to phase out underwriting and investment in carbon-based industries by 2040 as the insurer accelerates plans to align its operations with the Paris Climate Agreement.

Allianz

As part of its climate strategy, Allianz intends to completely phase out coal-based business models in P&C insurance and its investments portfolio by 2040, which is in line with scientific recommendations for a faster reduction of global greenhouse gas emissions over the next decade.

Under the plans, mining companies that plan new coal mines or generate more than 25 percent revenue from coal mining or more than 10 million tons of coal annually will no longer receive P&C insurance and financing from 1 January 2023.

The same applies to energy companies that build new coal-fired power plants or generate more than 25 percent energy or more than five gigawatts annually from coal, as well as service providers that generate more than 25 percent revenue from coal.

Business activities and investment opportunities of these companies that are exclusively renewable will continue to be insured or financed if an overall climate transition path is in place, Allianz explained.

The insurer noted that there have already been no new coal projects within its portfolio of policyholder funds since 2018.

Since 2015, Allianz has phased out over €6.3mn of investments in coal based business models; the threshold here will also be reduced to 25 percent from 2023.

From 1 July 2021, Allianz will extend the existing exclusion of single site insurance and investments of coal-fired power plants and mines in operation and construction to corresponding infrastructure such as coal ports.

“We want to protect our customers from the increasing risks of climate change and at the same time set the course for a sustainable economy today,” said Line Hestvik, chief sustainability officer at Allianz Group.

“Of course, this fundamental change can only be achieved gradually and together with other stakeholders. That is why we will stand by our clients as a partner on their path to climate-friendly business in the coming years. However, if companies do not develop a resilient climate strategy in the foreseeable future despite the regulatory and scientific framework, we will also withdraw as a last resort.”

Outlined within the insurer’s Sustainability Report, Allianz said its per capita greenhouse gas emissions have fallen by 62 percent over the last decade.

Allianz invested around €6.8bn in 116 wind and solar parks, and thus remains an important investor of the energy transition. Investments in certified green buildings rose from €14.6bn to €18.3bn; the volume of sustainable financial products in the investment portfolio increased by almost €10bn to €39.3bn.

Asset managers Allianz Global Investors and Pimco invested over €231bn in sustainable projects and companies.