High time for bold climate action - Allianz Ireland
3 min read October 28th, 2021
Climate change is one of the defining risks of the 21st century. The climate conference COP26, which starts this weekend, might be one of the last chances to come to grips before the devastation and cost spiral out of control.
Humanity is in a perilous position entering the UN-brokered international climate talks in Scotland, known as COP26, beginning this weekend. For the last two centuries, we’ve been filling our skies with greenhouse gases (GHGs). The result is that our atmosphere is denser with carbon dioxide than at any point in the last 4 million years.
In Allianz we have the ambition to lead climate action and shape around net-zero. We are constantly working to improve our carbon footprint as a company. That’s why we are one of 64 companies in Ireland committed to the Business in the Community Low Carbon Pledge. The first dedicated pledge generated by Irish businesses to set industry standards on sustainability and reduce carbon usage.
The urgently needed climate action requires ambitious policy decisions at the COP26 to spur business decisions in favor of climate solutions. This will enable us to accelerate action together.
Climate disasters threaten our planet
The majority of international climate scientists state that we are heading towards a planetary emergency and that limiting global warming and adapting to more frequent weather extremes are crucial. The insurance sector – and especially global players like Allianz – is exposed to these risks. Climate change is increasingly affecting our business: through insurance policies, for instance, those covering property damage and other losses, as well as changes in sectors and business models we underwrite.
Recognizing that climate change will impact our clients and communities in which we operate, Allianz systematically considers sustainability criteria in all insurance and investment business activities. A global challenge can’t be solved alone, and thus we gather in sector-wide networks and work with other insurance companies and international political organisations on establishing sustainability and net-zero standards for the insurance sector.
One of our global flagship partnerships is the United Nations-convened Net-Zero Asset Owner Alliance (AOA), of which we have been a founding member. This network of committed institutional investors now has 56 members, comprising pension funds and insurance companies representing $9.3 trillion in assets under management. The members commit to transitioning their portfolios to net-zero GHG emissions step by step latest by 2050 and will deliver to the first interim target to reduce their portfolio carbon footprint by 16% - 25% already by 2025. All members plan to regularly report on progress.
Seconding this successful blueprint, Allianz has recently joined the newly established Net-zero Insurance Alliance and the Net-Zero Asset Manager Alliance. Allianz helped form the Alliances because we believe capital markets are one of the most critical tools available to fight climate change. Asset owners, asset managers and insurers have a unique power to shift capital flows to speed the transition to clean energy and build the net-zero economy.
Further, we stopped financing coal-based business models in 2015. Since then, no new investments have been allowed, equity stakes have been divested and fixed income investments made before 2015 are in run-off. Coal-based business models will be phased out in our insurance and propriety investments by 2030 (Asia 2040). In our own house, we plan to source 100% renewable power for our group-wide operations by 2023.
This decade is decisive
With COP26 upon us, there is more ambition and commitment to tackle climate change than ever. In Allianz we believe we must seize this opportunity to inspire real-world action and change.
Climate change is not a problem that can be put off. It is here, and the impacts are already too costly for people and our planet. Decisive advances must be taken this decade to hit the mid-century target of 1.5°C. Further delays mean dramatically more harm and a vastly more costly bill to make up for the lost time.
As one of the world’s largest insurers and institutional investors, we will do our part. We are willing to face short-term effects on our portfolios to invest long-term and to use our leverage to shape a fair transition to a low-carbon future.
For more information on what Allianz are doing globally in the area of climate change, click here.
