Allianz Accelerates Exit from Insurance and Investment for Coal-Based Businesses
Leading insurance and investment group Allianz announced today an expansion of its sustainability guidelines regarding carbon-based businesses, including an acceleration of the company’s exit from providing insurance services to coal producers and coal-based energy companies who do not have credible transition strategies.
Allianz introduced its initial coal restrictions in 2015, and has been tightening its criteria around its activities with coal-based businesses since that time. The company has already announced that it will phase out coal-based business models from its investment and property and casualty insurance businesses by 2040, and last year announced an interim goal to exclude insurance for companies with more than 25% of revenue or power produced from coal by 2023.
Allianz’s updated coal policy tightens its restrictions to coal producers to companies that mine more than 10 million tons of coal annually, pledging that they will no longer receive property and casualty insurance and financing beginning January 1, 2023. Additionally, the same restriction applies to energy companies that build new coal-fired power plants or generate more than 25% of their energy or more than five GW annually from coal, as well as service providers that generate more than 25% of revenue from coal.
The company said that it will consider exemptions to the new restrictions for companies with a credible plan to transition their businesses away from coal, on an individual basis. If the company’s plan is assessed as being aligned with a pathway of limiting global warming to 1.5°C, it will be exempt. If the plan is assessed as aligning with a “well below 2°C” pathway, Allianz will move the company to its watchlist, and engage on the development of a 1.5°C strategy.
Line Hestvik, Head of Sustainability at Allianz Group, said:
“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.”