€865bn assets in France and Germany pledge coal divestment
Major European financial institutions including the world's largest insurer have this week pledged to reduce their exposure to coal investments and transition towards clean energy.
German insurer Allianz, French investor Caisse des Dépôts and French insurance corporation CNP Assurances have all made big commitments, reducing the coal exposure of more than €865bn of assets and potentially mobilising more than €20bn into green sectors.
Allianz, which has annual revenue of €122bn, announced it will no longer invest in mining companies and utilities that generate more than 30% of their sales or energy creation from coal
Allianz CIO Andreas Gruber said the shift will occur over the next six months while the firm also plans to double its exposure to wind energy to about €4bn. He said Allianz made the move with “an eye on the 2C goal of the Paris climate negotiations as well as the economic risks involved".
Climate campaign group 350.org welcomed the 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.”
“Decisions of large investors like Allianz, however, also hit the industry’s financial stability. It sends a clear signal to investors that the world is rapidly moving away from fossil fuels towards renewable energy.”
French investment firm Caisse des Dépôts set itself the goal of reducing the carbon footprint by of its investments by 20% over the 2014-2020 period. Caisse des Dépôts also said by the end of 2015 it will drop its share and debt securities in any companies with more than 25% of turnover coming from thermal coal.
More generally, the group said it will not finance new production capacities for coal-based energy and instead aims to mobilize €15bn to for ecological and clean energy projects by 2017. So far, €6bn is already committed.
Finally, French insurer CNP Assurances has set a target to reduce the carbon footprint of its directly-held equities portfolio by 20% by 2020. In 2015, CNP Assurances will have dropped almost €300m of bonds in coalmining and coal-based energy producing companies. At the end of the year it will no longer have any direct holdings in listed shares and bonds in companies whose turnover is more than 25% derived from coal.
Going forward, CNP Assurances also committed to doubling the volume of its green investments (infrastructures, private equity and green bonds) to €1.6bn by the end of 2017.
Phillipe Joubert, the chair of the Prince of Wales EU Corporate Leaders Group on Climate Change, recently told edie that the financial world was becoming increasingly supportive of green projects, with emergence of green finance at HSBC, Citibank and Santander among others and the increasing acceptance of a carbon bubble.