Allianz announced today new fossil fuel exclusion policies on <\/span>coa<\/span><\/u>l<\/span><\/u> <\/span><\/a>and <\/span>tar sands<\/a><\/u>. Unfortunately, the announcements fall flat, given that Allianz is one of the biggest insurers worldwide and has joined both the Net-Zero Insurers Alliance and the Net-Ze<\/span>ro Asset Owners Initiative. As summarized by Regine Richter of Urgewald, <\/b>\u201cThe updated policy is an improvement in excluding more climate killing coal companies. Yet there are new exemptions from the exclusions that might allow some creative coal companies to argue for staying insured.\u201d On oil & gas, the measures announced simply catch up with developments in the sector but the real work is yet to start.<\/b><\/p>\n<\/div><\/div><\/div> With its updated coal exclusion policy Allianz has committed to the following new measures.<\/p>\n On the direct insurance of specific projects, it has scrapped its exceptions for coal plants, and now excludes coal infrastructures projects in addition to coal mines and coal plants. <\/b><\/p>\n Regarding companies exclusions<\/b>, it has updated its exclusion criteria for both its insurance business and its own investments:<\/p>\n For its coal phase-out plans, it was already aiming for a total coal phase-out worlwide by 2040. It has completed its intermediary steps<\/b>:<\/p>\n A last element is the addition of an exemption for coal companies when they are assessed by Allianz as \u201caligned with a 1.5\u00b0C pathway\u201d and of a possible exemption from these exclusion criteria when coal companies are deemed \u201caligned to a well below 2\u00b0C pathway\u201d. These exemptions do not apply to coal developers. On oil & gas, Allianz adopted these first measures for its insurance business from July 1st 2021: Allianz has also decided to exclude the following companies from the tar sands sector in its own investments: In these funds, Allianz will also exclude any oil sands projects and it will limit to 20% the share of companies involved in the tar sands sector.<\/p>\n<\/div> The decision of Allianz to stop insuring almost all new coal projects, including coal infrastructure,<\/b> is welcome<\/b>. That\u2019s an important step forward.<\/p>\n The commitment not to insure and to divest from coal developers is also a great step forward. However, such a commitment does not come into force this year but only in 2023,<\/b> whereas other insurers such as AXA already committed to excluding developers from all coverage. Given that any new coal project is inconsistent with the remaining carbon budget, it’s reasonable to expect Allianz to be consistent with its pledge to become a net-zero insurer and investor. This would mean immediately extending its previous zero tolerance for investment in coal plant developers to all companies with coal expansion plans in all <\/i>business lines. Moreover, the restricted definition adopted by Allianz regarding coal mine developers may allow some companies to slip through the net.<\/p>\n The strengthening of its exclusion criteria (relative and absolute) is, even if slightly late, equally welcome.<\/b> Allianz was indeed planning to apply certain exclusion thresholds, but the conditions were cumulative, whereas now, exceeding any of those is sufficient for an exclusion from Allianz\u2019s investment portfolio and insurance coverage<\/b>. This shrinks the space left for coal companies to maintain their old bad habits, if they want to continue working with Allianz.<\/p>\n However, <\/span>the new exemption framework Allianz has introduced with its new policy is questionable<\/b>: Allianz will allow some exceptions for companies that the insurer will consider, with the backing of \u00ab\u00a0independent <\/span>third-party target as well as performance assessments\u00a0\u00bb, to have adopted \u00ab\u00a0<\/span>a credible and public strategy to transition away from coal at a pace which is compatible with the <\/span>scientific pathways of limiting global warming to 1.5\u00b0C\u00a0\u00bb. <\/span><\/p>\n Finally, Allianz’s commitment to reduce to 5<\/span>% its exclusion threshold a<\/span>s of year-end 2029, <\/span>with the exception of Asia where 10% will apply, <\/span>shrinks the space for the most problematic European coal companies to qualify for the exemptions. However, the exception for Asia implies that<\/span> South Korea, an OECD country, could exit coal after 2030, which is not aligned with best practices and climate science. <\/span><\/p>\n<\/div> Allianz (Re\/Insurer) scores in the Coal Policy Tool<\/b> Allianz (Asset owner) scores in the Coal Policy Tool<\/b><\/p>\n1. What’s new <\/b><\/h5><\/span>
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2. Our analysis on coal – Stricter exclusion criteria, but loopholes remain<\/b><\/h5><\/span>
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