Allianz hopes “transparent and tangible” net-zero transition plan will encourage industry advocacy

Last week, Allianz published its first comprehensive net-zero transition plan, substantiating the insurer’s long-term strategic climate commitment to achieve net-zero emissions by 2050 in its proprietary investment and P&C underwriting portfolios.

Related topics:  Allianz,  insuring the planet
Tabitha Lambie | Editor, Protection Reporter
11th September 2023
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"We are taking the necessary steps towards the full decarbonisation of our insurance and investment portfolios by 2050."
- Gunther Thallinger, member of Allianz SE’s Board of Management, Investment Management, Sustainability

Allianz has officially outlined concrete intermediate targets for 2030 to reduce GHC emissions in its business operations, proprietary investment portfolio and P&C insurance business. As well as these targets, the insurer has announced plans to strengthen its existing engagement with customers and investee companies through a joint net-zero transition journey and expansion of its targeted growth of renewable energy, low carbon and further transition technology as well as sustainable mobility in both the investment and insurance business.

Allianz hopes this transparent and tangible net-zero transition plan will encourage customers, business partners, the financial sector and other industries to unite in their advocacy for climate change, alongside policymakers and governments.

Ultimately, Allianz’s net-zero transition plan should achieve 150% profitable growth in revenues from renewable energy and low-carbon technology solutions in the commercial segment by 2030 versus 2022. Allianz is already a leading insurer of solar photovoltaic and wind farms, both onshore and offshore, but it now plans to provide coverage for emerging hydrogen technologies too. As an investor, Allianz will support advances in renewable energy by investing 2obn euros into climate and cleantech solutions in line with the EU sustainability regulation.

This investment will contribute significantly to the insurer’s mission of reducing emission intensity to 45% across multiple lines of its corporate insurance business, which consists of large company customers that already report their GHG emissions. For its retail motor insurance portfolio, Allianz will reduce carbon emissions by 30% in nine key European markets by 2030 (Austria, Belgium, France, Germany, Italy, Netherlands, Spain, Switzerland, UK).

Although these are the first intermediate targets set for the Allianz P&C insurance portfolio, Allianz has already surpassed previously set 2025 intermediate targets for its proprietary investment portfolio. But these new targets will half emissions by 2030 compared with 2019, with a dedicated focus on actively driving emission reductions in its energy, steel and automobile sectors.

The climate pledge for Allianz’s business operations to be net-zero by 2030 is unchanged, although the timeline has been altered to the 31st December 2029, for all segments.

Moving forward, Allianz’s proprietary investments of policyholder funds will target the end of this decade to reduce absolute owned emissions by 50%, compared to 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 the end of 2029. Likewise, all directly held real estate assets and joint ventures invested by Allianz are to be in line with the scientifically based 1.5 degree pathways in terms of total emissions, and the intensity of GHG emissions of investments among corporates (both listed and non-listed) will reduce by 50% compared to 2019.

Besides portfolio reduction targets, Allianz will now prioritise emission reduction targets for electricity utilities, oil, and gas, steel, and automobiles. This will be implemented through active dialogue between the companies and our asset managers working in partnership with sector-wide initiatives.  

Allianz has also set decarbonization targets for the P&C commercial insurance portfolio, referring to GHG emissions from businesses insured by various Allianz entities, such as Allianz Commercial. Starting with the high-impact sub-portfolio of large companies that already report their GHG emissions and are insured by Allianz Global Corporate & Speciality, Allianz aims to reduce the emissions intensity by 45% by 2030. The insurer plans to achieve this target by gradually phasing out the coal-based business models by 2040 for its adjusted underwriting approach for oil and gas companies introduced in April 2022, expanding its renewable energy and two-carbon technology insurance, and committing to engagement with corporate customers to encourage action on the net-zero transition.

In its P&C retail insurance business, Allianz has set initial climate targets for its motor business. The insurer will reduce carbon emissions in nine key markets by 30% by 2030, compared to 2022. Transport, including private mobility, is considered one of the most emission-intensive sectors, so Allianz is encouraging more customers to consider switching to low-emission vehicles while expanding its range of products and services in electromobility and multi-modal mobility.

Commenting on this net-zero transition plan, Oliver Bätes, CEO of Allianz, has said:

“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 degrees.

“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.”

Gunther Thallinger, member of Allianz SE’s Board of Management, Investment Management, Sustainability, added:

“We are setting tangible targets to build transparency and trust and lead by example. Our comprehensive transition plans underpin our commitment to changing our own business and to encourage as well as support our customers and partners in their transition journeys.”

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