Many insurers are ruling out coverage for coal businesses as they become more concerned about the environment and the impacts of climate change on the industry. Now, insurance giant Allianz Group (Allianz) has affirmed its commitment to refusing to support the thermal coal industry.
Allianz announced that, from July 01 this year, it will cease to insure or invest in infrastructure that derives more than 51% of revenue from the thermal coal industry. This includes coal ports and railways.
From January 01, 2023, Allianz will no longer provide property and casualty (P&C) insurance or make proprietary investments in any company that plans a new coal mine or any existing mining company that generates over 25% of revenue from coal mining or produces more than 10 million tonnes of coal annually.
The insurance giant also confirmed that it will no longer provide P&C insurance or make proprietary investments in energy companies with over 5,000 megawatts of installed coal generation capacity, build new coal-fired power plants, or generate over 25% revenue or more than five gigawatts from coal annually.
Lastly, Allianz stated it will no longer provide P&C insurance to businesses that generate over 25% of revenue through services provided to a thermal coal mine or coal-powered electricity plant, for example, trucks, movable plant, maintenance, repair, or construction services.
However, Allianz clarified that it will continue to support companies with a transition plan away from thermal coal at a pace compatible with the scientific pathways of limiting global warming to 1.5°C – with the plan confirmed by an independent third-party performance assessment.
According to the insurance giant, its criteria to assess companies include a public commitment to phase out coal and a corresponding long-term strategy, plans to close or divest coal assets, and company-level greenhouse gas reduction targets.
“Renewable energy business activities of such companies will continue to be insured or financed if an overall coal phase-out plan is in place,” Allianz said in a statement.