Focus: Corporate Responsibility - Allianz pledges massive investment in renewables

Anita Pati,

WWF is helping the insurance, banking and asset management industries manage climate change risks.

Allianz Group, the global financial services group, has promised to tackle climate change at board level with a pledge to invest up to £334.5m in renewable energies by 2010.

The announcement came with the launch last week of its report Climate Change and the Financial Sector: an Agenda for Action, drawn up in consultation with the WWF.

Although the group will also continue to invest in companies that use fossil fuels, the pledge marks a commitment by the financial giant to assist the insurance, banking and asset management industries to better manage the risks from climate change.

"Climate change creates significant costs for the financial industry," said Dr Joachim Faber, chief executive of Allianz's asset management arm.

"In the interests of our clients and shareholders, we are obliged to take these risks into account when making decisions on insurance underwriting, investments or lending credit."

Robert Napier, chief executive of WWF, applauded the bank's stance on the issue: "It's a huge statement - Allianz is saying it will rank climate change on a par with other risks in insurance, banking and fund management."

Andrew Torrance, chief executive of UK-based insurance subsidiary Allianz Cornhill, said that Europe, thought to be warming 40 per cent faster than the rest of the world, had already sustained severe damage in both financial and environmental terms.

He added that climate change had cost the global insurance industry £21bn in 2004, which could result in premiums rising by between 2 and 4 per cent each year.

Torrance said it made financial sense to exploit the opportunities latent in climate change. Allianz, he said, intended to focus on cutting its own carbon emissions and to invest in such potentially large markets as emissions trading, renewables and weather derivatives.

The report was timed to coincide with the G8 summit this week, where climate change will be high on the agenda. In an appeal to the world leaders attending, Dr Faber said: "We need a clear policy framework on climate change, especially with regard to the post-2012 Emission Trading Scheme allocations."

Napier called for the Government to outline a long-term plan of action to make "deep cuts" in CO2 emissions - at least 60 per cent globally by 2050.

WWF started working with Allianz 10 months ago in an advisory capacity and hopes to engage other financial institutions with environmental issues in future.

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