Allianz to phase out coal-based business models in P&C insurance by 2040

Global insurer Allianz has unveiled a number of new guidelines for coal-based business models in both property and casualty (P&C) insurance and proprietary investments from 2023 onwards.

By 2040, Allianz intends to completely phase out coal-based business models in P&C insurance, which is in line with scientific recommendations for a faster reduction of global greenhouse gas emissions over the next decade.

Expanding on this, Allianz notes that mining companies that plan new coal mines or generate more than 25% revenue from coal mining or more than 10 million tons of coal annually, will no longer receive P&C insurance and financing from January 1st, 2023.

The same also applies to energy firms that build new coal-fired power plants or generate more than 25% energy or five gigawatts annually from coal, alongside service providers that generate more than 25% revenue from coal.

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

The insurer notes that since 2018, there have been no new coal projects in the portfolio of policyholder funds. And, since 2015, Allianz has phased out more than €6.3 million of investments in coal-based business models, with the threshold here set to be lowered to 25% from 2023.

Additionally, from July 1st, 2021, the carrier 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.

Line Hestvik, Chief Sustainability Officer at Allianz Group, commented: “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.

“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.”

As well as the expansion of guidelines, Allianz has also released its 20th Sustainability Report, which reveals the firm is on track to reach its goals in its operations. Over the past decade, Allianz says that per capita greenhouse gas emissions have fallen by roughly 62%.

In 2020, the share of renewable energy was 57% and this will be expanded to 100% by the end of 2023.

The carrier invested roughly €6.8 billion in 116 wind and solar parks. At the same time, investments in certified green buildings increased from €14.6 billion to €18.3 billion, while the volume of sustainable financial products in the investment portfolio increased by almost €10 billion to €39.3 billion.

Furthermore, both Allianz Global and PIMCO expanded their ESG approaches, and invested more than €231 billion in sustainable projects and companies.

The post Allianz to phase out coal-based business models in P&C insurance by 2040 appeared first on ReinsuranceNe.ws.

Source: https://www.reinsurancene.ws/allianz-to-phase-out-coal-based-business-models-in-pc-insurance-by-2040/

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