German financial giant Allianz slashes coal investments

BERLIN — Germany's Allianz SE, one of the world's largest financial asset managers, said yesterday it would over the next six months decrease investments in companies using coal and boost funding on those focused on wind power.

CEO Oliver Baete said Allianz will no longer invest in companies if more than 30 percent of sales come from coal mining or if they generate more than 30 percent of electricity from the fossil fuel.

He said Allianz decided to make the move ahead of next week's United Nations climate change conference in France with "an eye on the two-degree goal of the Paris climate negotiations as well as the economic risks involved."

As of last year, Allianz managed about 1.8 trillion ($1.9 trillion) euros in assets, with a focus on the US, Germany, France, Italy, Britain and the Asia-Pacific region.

The company plans to release more details later in the week, but experts estimate the decision on coal would affect some 4 billion euros in investments.

Some 90 percent of the investments affected are in bonds that will be allowed to mature while the six-month frame will apply to equities, Allianz said.

In Paris, more than 190 countries are set to negotiate a new global pact to fight climate change and deal with its consequences. Most of them have already presented plans to slash or rein in greenhouse gas emissions after 2020, when the deal is supposed to take effect.

Environmental activist group 350.org applauded Allianz's decision, saying "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 an industry that is wrecking the planet."

The group said the decision from the company and others to divest from coal will weaken the fossil fuel industry's political influence.

"Decisions of large investors like Allianz, however, also hit the industry's financial stability," the organization said. "It sends a clear signal to investors that the world is rapidly moving away from fossil fuels towards renewable energy."

Allianz investment chief Andreas Gruber told ZDF television that the company's decision was made partially out of concern over global warming, but also because it made good financial sense.

He said the company is convinced climate-damaging investments won't pay off in the future and said Allianz will double wind energy investments to 4 billion euros ($4.4 billion) in coming years. It expects a return of five to six percent on those investments.

"We want to support the negotiations at the climate summit in Paris in December, but also send a signal to our industry and the capital markets," Gruber said.