Allianz has published its first comprehensive net zero transition plan with a long-term strategic climate commitment to achieve net zero emissions by 2030 in its own business operations, proprietary investment portfolio and property and casualty (P&C) insurance business.
The insurer will also strengthen its existing engagement activities with customers and investee companies on a joint net-zero transition journey and expand its targeted growth of renewable energy, low-carbon and further transition technology, and sustainable mobility in both the investment and insurance business, it announced.
By delivering a transparent and tangible net-zero transition plan, Allianz aims to advocate climate action joining forces with customers and business partners, the financial services sector, and other industries, as well as policymakers and governments.
“With extreme weather events, this summer has reinforced the urgency to act on climate change. Governments, businesses and individuals must work together to build resilience and limit global warming to 1.5°C,” said Oliver Bäte, chief executive officer of Allianz.
Therefore, at Allianz, “we are committed to delivering on our own net-zero targets, as well as partnering with our clients and investee companies in their transition. We believe our intermediate targets will help us realise our growth potential and contribute to a healthier, more secure future for everyone,” he added.
The Allianz transition plan includes a commitment to achieve 150% profitable growth in revenues from renewable energy and low-carbon technology solutions in the commercial insurance segment by 2030 versus 2022.
Furthermore, it aims to provide coverage to the emerging hydrogen technologies. As an investor, Allianz plans to support the ramping up of renewable energy by investing an additional €20bn in climate and cleantech solutions in line with the EU sustainability regulation.
This builds upon Allianz’s previous major investments in green energy infrastructure, including wind and solar farms, green hydrogen or green ammonia.
Most recently, Allianz Capital Partners acquired a minority interest in Norwegian green hydrogen and green ammonia production plants developer Fuella. The asset manager invested €20m on behalf of Allianz insurance companies to help fund Fuella’s pipeline of projects.
For the investments of policyholder funds, Allianz targets by the end of this decade to reduce absolute owned emissions by 50%, compared with the 2019 baseline for listed equity and corporate bonds. At the end of 2022, 36% have already been achieved, with the remaining to be materialised by end of 2029.
All directly held real estate assets and joint ventures invested by Allianz are to be in line with the scientifically based 1.5°C pathways in terms of total emissions. Additionally, the intensity of GHG emissions of investments in corporates – both listed and non-listed – are to be reduced by 50% compared to 2019.
Günther Thallinger, Allianz’s member of the board management responsible for investment management and sustainability, said: “Targets and plans are set individually and unilaterally by each company; nonetheless, we must work together in unison to tackle climate change. Our approach is to partner, and work together on risk mitigation and economic transformation.”
He said Allianz’s transition plan was set based on recommendations of the UN High-Level Expert Group on Net-Zero Commitments of Non-State Actors and informed by credible industry-led approaches, such as the Target Setting Protocol of the Net-Zero Asset Owner Alliance.
“Our Net-Zero Transition Plan is significant on several levels. It is ambitious yet achievable while remaining transparent and specific, especially on setting intermediate targets and actions. The year 2050 sounds like a long way off. However, to substantiate commitments and build trust you must set intermediate targets,” Thallinger explained.
After joining the Net-Zero Insurance Alliance (NZIA) in July 2021, Allianz left the initiative earlier this year following ESG backlash in the US as Attorneys General from 20 US states wrote to members of NZIA to raise concerns about the legality of their shared net zero commitments.