Allianz divesting from fossil fuels, focusing on wind power

The company wants to "send a signal to our industry and the capital markets."

Over the next six months, Allianz will decrease investments in companies using coal to focus on businesses using wind power.

Allianz will stop investing in companies if more than 30 percent of sales come from coal mining or if they generate more than 30 percent of electricity from fossil fuels, says CEO Oliver Bate.

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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 roughly 1.8 trillion euros in assets, focusing on the U.S., Germany, France, Italy, Britain and the Asia-Pacific region.

Experts estimate the decision on coal would affect some 4 billion euros in investments.

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The six-month frame will apply to equities. Bonds, which make up 90 percent of affected investments, will be allowed to mature.

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

He added 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 per cent on those investments, Gruber said.

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

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Transcontinental Media G.P.