The German insurer Allianz will increase investments in technologies that have a positive impact on climate in a bid to cut the carbon footprint in its investment portfolio by 25% until 2025.
At the same time, the institution will refrain from allocating capital to “carbon intensive business models”, it said.
Allianz will eye in particular investments in sectors that are “emission-intensive” such as energy production, transportation, and car manufacturing to reduce emissions in its portfolio, said Günther Thallinger, a member of Allianz’s management board responsible for investment management and ESG, in an interview with Bloomberg.
Allianz has set the 25% target to reduce greenhouse gas (GHG) emissions for selected asset classes held in its portfolio as an interim target to reach carbon neutrality by 2050.
It will reassess its equities and corporate bonds in line with the Paris Agreement’s central objective of keeping global average temperature increases to 1.5°C, below the critical threshold of 2°C, it said. This will apply also to the total emissions for real estate investments.
It also intends to cut emissions generated through business operations by 30% compared to 2019.
With the measures, Allianz will stick to frameworks designed by the Net-Zero Asset Owner Alliance, which require members to reveal carbon emission reduction targets to reach carbon neutrality by 2050.
“We are convinced that integrating climate and sustainability aspects will have an impact on our investment strategy,” Thallinger said.
He added that the company has an opportunity to “mitigate climate-related risks and take advantage of opportunities offered by future-oriented business models”.
Allianz will keep in its portfolio companies with a sustainable business profile that follow the mandate of the Paris Agreement. At the same time, it will actively pursue dialogue with firms to push them to meet climate targets.
Allianz has also pledged to transparently report on the progress made to achieve its targets every year.
Oliver Bäte, chair of the board, said Allianz will continue to work together “with politics, business and civil society” to shape a future based on respect for the environment and social justice.
Last year’s events, which are still unfolding, have shown that “markets and countries must learn to deal with new risks such as pandemics, climate change and social unrest,” he said.