Allianz announces new guidelines for coal-based businesses

Global insurer, Allianz, has announced that as part of its climate strategy, it would further limit property and casualty insurance and investments for companies with carbon-based business activities.

This is in line with scientific recommendations for a faster reduction of global greenhouse gas emissions over the next 10 years.

The key changes are:

• Mining companies that plan new coal mines or generate more than 25% revenue from coal mining or more than 10m tons of coal annually will no longer receive property and casualty insurance and financing beginning 1 January 2023.
• The same applies to energy companies that build new coal-fired power plants or generate more than 25% energy or more than five gigawatts annually from coal, as well as service providers that generate more than 25% 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. There have already been no new coal projects in the portfolio of policyholder funds since 2018.
• Since 2015, Allianz has phased out over EUR6.3m ($7.6m) of investments in coal-based business models; the threshold here will also be reduced to 25% 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.

Significant reduction in greenhouse gas emissions

Allianz says it is on track to reach its sustainability goals in its operations: over the past 10 years, per capita greenhouse gas emissions have fallen by 62%. The share of renewable energy was 57% in 2020 and will be expanded to 100% by the end of 2023.

Allianz says this as it releases its 20th Sustainability Report, outlining its environmental, social and corporate governance achievements in fiscal year 2020, as well as its sustainability strategy and targets.

In the coming years, the company plans to further embed environmental and social criteria in its business strategy, product development and marketing. Allianz meets the increasing interest in sustainability from customers, applicants and investors through numerous insurance solutions with environmental or social benefits, sustainable financial products and through the reduction of climate gases in its core business and operations, in accordance with the Paris Climate Agreement.

Sustainable insurance and financial products not only support the transition to a low-carbon economy, but also open up growth opportunities.

Investment of policyholder funds

In the investment of policyholder funds, Allianz will continuously reduce greenhouse gas emissions to net zero by 2050, reaching an interim target by 2025. Coal-based business models in investment and property and casualty insurance will be phased out by 2040.

Allianz will also apply gradual exclusions to particularly emissions-intensive business models, such as the extraction and use of thermal coal. Identifiable environmental and financial risks will thus be minimised in its portfolios in the medium term.

Source: Asia insurance review