Insurance giant Allianz has announced it will no longer support the coal industry in a move that has been hailed a revolution for the transition to a low-carbon economy.
The German-based company, which has €1.9 trillion of assets under management, will stop selling insurance to both single coal-fired power plants as well as all planned and operating coal mines, effective from last week.
However, companies that have fossil fuel assets as part of its portfolio, along with renewable energy will continue to be insured but subject to review under strict environmental criteria. This move is part of the company’s decision to support the global efforts of countries around the world trying to accomplish a sustainable future under the Paris Climate Agreement, to limit global temperatures below 2°C.
Allianz has said, “We will no longer invest in energy companies that put the two-degree target at risk by extensively building coal-fired power plants.”
By doing this they have become the first insurance companies to commit to the science-based target’s initiative, designed to help corporates effectively cut emissions to prevent the impacts of climate change.
This means by 2040 it will phase-out the carbon footprint of its own operations, increasing its renewable energy commitments and reducing its own exposure to the coal industry.
Oliver Bäte, Allianz’ CEO said, “climate change generates enormous economic and social risks. It is already harming millions of people today. As a leading insurer and investor, we want to promote the transition to a climate-friendly economy.”
Dr Günther Thallinger, an Allianz board member said, “As a long-term investor, we want to shape the change to a climate-friendly economy together with our clients. We will thus also strategically develop our investment opportunities in new technologies.”
Allianz is the latest insurance company to signal its intention to divest from the fossil fuel industry, especially coal as one of the most carbon-intensive energy sources. Alongside them, AXA has also stopped insuring coal plants and Lloyds of London and Generali Group have all made similar commitments to back away from the industry.
With these giant industry players making the commitment to step away from fossil fuels we hope to see more corporations make the switch to renewable energy and invest their support for a sustainable future!