Allianz becomes latest big investor to dump coal in part for climate reasons

Allianz, the German insurance and asset management giant, has become the latest big investor to announce that it is getting out of the coal sector due in part to its impact on the climate. Around €4bn worth of investments in the sector are said to be affected.

“Allianz is getting out of coal. This means we will cease to invest in companies which derive 30% of their sales or production from the energy source,” Andreas Gruber, Allianz’s Chief Investment Officer, told ZDF public television on Tuesday evening (November 24). Gruber said the sale of coal stocks would take place over the next six months, while coal bonds would be held until maturity but not rolled over.

Contacted by Responsible Investor, a spokesman said that as Group CIO, Gruber was in charge of €631bn in assets, including those from pension plans, insurance policies and funds. Of the total assets, around 0.6%, or €4bn, is invested in stocks and bonds from coal companies.

The spokesman also said that with the proceeds from the divestment, Allianz would double its allocation to renewable energy, with an emphasis on wind power. Allianz’s renewables portfolio, which besides 54 wind parks includes seven solar facilities, is currently worth €2.5bn.

The portfolio is overseen by Allianz Capital Partners (ACP), the insurer’s infrastructure investment arm.According to Gruber, Allianz’s divestment is driven in part by concern over coal’s impact on the climate. He told ZDF: “We want to support the negotiations at the climate summit in Paris in December and also send a signal to the insurance industry and financial markets in general.” Of the carbon dioxide (CO2) emissions from fossil fuels, coal’s share, at just under one-half, is the largest.

Allianz’s move was welcomed by 350.org, the fossil fuel divestment campaign devised by Bill McKibben. “As the world’s largest insurance company, Allianz knows a thing or two about risk – and there’s no greater risk for the climate than continuing to invest in a industry that is wrecking the planet,” said Nicolò Wojewoda, a campaigner with 350.org’s European arm.

Other big institutional investors that have announced plans to exit the coal sector recently include Swedish buffer fund AP2, French insurer AXA and earlier this month, Dutch pension investor PGGM. All the investors cited coal’s impact on the climate as a reason.

News of Allianz’s divestment contrasted with remarks made by Martin Skancke, Chairman of the Principles for Responsible Investment (PRI). He said a successful divestment push could drive down the price of coal mines and make it cheaper for large users to acquire long term supplies.

“So the effect is essentially to make coal cheaper for the consumer. I think we risk locking in use of coal for a long time if this happened,” Skancke was quoted by the Australian Financial Review as saying.