Allianz Global Investors first coal exclusion policy consists in excluding from its new investments, and divesting from, all companies which draw over 30% of their revenues from thermal coal, or produce over 30% of their electricity from coal.
Exceptions can be made for companies slightly over the thresholds (up to 5%-points more) and for companies breaching the coal power production threshold when power production makes less than 10% of their revenues, and if such companies have adopted a “credible decarbonization strategy.
2. Our analysis: a policy way behind Allianz’s standards as a group
According to the latest financial data available published in February 2021 on the website of the Global Coal Exit List (GCEL), Allianz Global Investors is a major global investor in the coal sector with US$ 2.1 billion invested in coal companies out of the US$ 7.9 billion of the total Allianz group’s investment exposure to coal. Concretely, this means that as of January 2021, Allianz GI was invested in 96 coal companies producing in total 1556 million tons of coal annually and operating 475 GW of combined coal power capacities. This includes 43 coal developers, including 31 companies planning the development of 137 GW of new coal power capacity.
By adopting a first coal exclusion criteria to start its divestment process, Allianz GI is finally acknowledging it must do more to combat climate change. However, Allianz GI fails to align its only exclusion threshold with best practices – such as excluding companies over a 30% coal exposure threshold while a growing number of financial institutions are adopting a 20% or lower threshold. It also completely ignores the two coal-related climate emergencies: stopping expansion and gradually phasing out existing coal assets.
By turning a blind eye to coal expansion, Allianz GI missed the point. Allianz GI must urgently blacklist and divest from all companies still planning to develop new coal mines, plants and/or infrastructure worldwide. As of January 2021, Allianz GI had US$437m invested in 43 coal developers, including Marubeni ($13m) and POSCO ($23m), which fall below the 30% exclusion threshold while respectively planning 4550 MW and 3300 MW of new coal power capacities in Asia and Africa. On this issue, Allianz GI is lagging far behind both its head office Allianz Group which plans to exclude all coal developers, and behind other asset managers including AXA IM which are already doing it.
Similarly, by not committing to completely phase-out coal by 2030 in Europe/OECD and 2040 worldwide, as clearly required by climate science, Allianz GI is not adopting the best practices set by many asset managers: Allianz has already committed to regularly reduce its exclusion threshold in order to fully exit coal by 2040, and DZ Bank’s asset manager committed to even earlier coal exit deadlines.
Lastly, its relative exclusion threshold is far from sufficient: it won’t effectively exclude large coal producers such as Glencore ($32m invested) and BHP ($95m). (that are highly diversified companies. This means Allianz GI must adopt absolute exclusion thresholds for companies producing over 10 million tons of coal annually or with over 5 GW of coal power capacities. In addition, the fact that the investor can make exception for companies over its only exclusion criteria further weakens its policy.
Overall, the discrepancy between this policy and the group’s current policy is striking. In fact, Allianz GI adopt a policy that is very similar to the policy adopted by Allianz as an asset owner back in 2015, before COP21, more than 6 years ago. Since, the group has strengthened its policy with the exclusion of coal developers from 2023, some absolute exclusion thresholds also from 2023, and a coal exit strategy by 2040.
Allianz Global Investors’ scores in the Coal Policy Tool
This table presents the coal scores of Allianz Global Investors based on five criteria of the Coal Policy Tool