Berlin, Munich, Paris | May 3rd, 2021 – Shortly before its annual general meeting on Wednesday, Allianz announced a tightening of its coal policy and new restrictions on its business with the oil sands industry. While there is some progress on coal here, much remains to be done, above all on oil and gas.
A lot remains to be done regarding the general exclusion of oil and gas
The new coal policy tightens existing restrictions on coal insurance, which will apply from 2023 on:
- companies building new coal-fired power plants will now generally not be eligible for insurance coverage anymore.
- companies were previously to be excluded from insurance if they generated at least 25 percent of their electricity from coal AND operated at least 5 gigawatts of installed coal-fired generating capacity. With the revised policy, one of the two criteria is now enough to be excluded.
The second of these new rules will have a noticeable impact on Alliance’s business relationships with Sev.en, an energy company in the Czech Republic that operates two particularly dirty coal-fired power plants that are 40 to 50 years old. Sev.en has a coal share of power generation of well over 50 percent, but has less than 5 gigawatts of installed capacity. Under the previous criteria, the company would therefore still be insurable. Now, it is no longer.
The Czech Allianz subsidiary announced in a press release on Thursday that it would terminate its remaining insurance policies for the Počerady and Chvaletice power plants at the end of this year. This is also a success for the Czech climate protection organization Re-set, which had sharply criticized Allianz for their business relationships to Sev.en.
There are further changes in the new Allianz coal policy: previously possible exceptions for insuring individual coal-fired power plants no longer apply. However, companies can still get insured if they do not meet the current criteria but have a coal phase-out plan that is compatible with the 1.5°C target of the Paris Climate Agreement.
Regine Richter, Energy Campaigner at Urgewald, commented: “While its coal phase-out is not watertight yet, Allianz will exclude more coal companies from insurance than before, which is positive. With these criteria, the pressure increases on the German coal giant RWE. After AXA announced an exclusion of RWE in March, Allianz will now also have to sever its business ties with RWE by 2023 to be in line with its policy update. Today, another leading insurer has made it clear that time is running out for fossil giants such as RWE.”
Lucie Pinson, Founder and Executive Director of Reclaim Finance, concluded: “Allianz is finally cracking down on companies with coal expansion plans, albeit belatedly, and should now be a driving force for the phase-out of coal in Europe by 2030. However, these new announcements are not enough to honor its commitment to be a net zero insurer and investor by 2050. It has taken six years for Allianz to get to this point since it first adopted a policy on coal and the climate crisis doesn’t afford us baby steps. With COP26 looming, Allianz must go further, close all remaining loopholes on coal and say no to new oil and gas production projects.”
For the first time, Allianz has also published a policy to exclude the oil sands sector. Oil sands projects and new oil sands pipelines will be excluded, as will companies that make more than 20 percent of their revenues from oil sands, according to the policy.
Richter said: “An exclusion of oil sands companies is overdue, many other insurers have already implemented this in recent years. For Allianz, it is a first step that must not be allowed to remain the last. If it seriously wants to be a leader in climate protection, we expect a policy that consistently scales back oil and gas operations altogether.”
Allianz claims a climate leadership role: In addition to its membership in the Net-Zero Asset Owner Alliance, it also became a member of the Net-Zero Insurance Alliance two weeks ago. Both initiatives aim to accelerate the transition to a climate-neutral society, which is incompatible with Allianz’s ongoing investments and insurance business in the oil and gas sector.