German insurer Allianz has announced its plan to stop insuring single coal-fired power plants and coal mines in operation or planning, in a bid to help drive change toward a low-carbon economy.
The new plan, which is effective immediately, is part of Allianz’s efforts to significantly expand its climate strategy and support the global change to a low-carbon economy over the coming decades.
By 2040, Allianz aims to phase out its proprietary investments in coal-based business as well as its insurance coverage of such risks. It also targets to reduce its carbon footprint by 2040.
Additionally, the firm intends to phase out all coal-based risks from its property and casualty (P&C) insurance portfolios by 2040.
Allianz said in statement: “Additionally, the threshold value in the energy sector for the maximum share of coal used by the emitters that Allianz finances will be successively lowered in 5% steps from currently 30% to zero by 2040.”
The insurer, with immediate effect, is also planning to stop investing in energy companies that jeopardize the two-degree target of the Paris Climate Agreement by extensively building coal power plants.
The firm, together with partners from science, civil society and economy within the non-profit Science Based Target initiative (SBTi), intends to develop underlying methods and targets by the end of 2018.
Allianz SE and responsible for investments and ESG management board member Dr Günther Thallinger said: “We are convinced that our approach will further improve the risk/return profile of our portfolio in the long term, and that we will strengthen our position as a forward-looking investor.
“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.”
In November last year, a industry scorecard released by the Unfriend Coal campaign showed that Insurance companies have pulled out $20bn of investments in coal and a significant number of them are considering to end underwriting for new coal projects.