Allianz Global Investors’ exclusion policy on coal has drawn criticism for not going far enough.
The asset manager last week issued an enhanced global exclusion policy that included a dedicated policy on coal divestment as part of a commitment to tackling climate change.
AllianzGI said that from December it would refrain from investing in companies that derive more than 30% of their annual revenue from thermal coal extraction, and refrain from investing in companies where more than 30% of their electricity production is based on coal.
However, the policy was criticised by Urgewald, an environmental and human rights group based in Germany, for lacking ambition.
Regine Richter, finance campaigner at Urgewald, said: “It is good that Allianz Global Investors finally released its first coal policy. This was long overdue, since Allianz‘s existing coal policy doesn’t apply to AllianzGI.
“However, the policy is far from meeting the level of ambition we need to see in the year 2021. The threshold of 30% for coal share of revenue or electricity production is simply too high.”
A lack of absolute thresholds created “serius loopholes”, said Richter. According to Urgewald, Europe’s largest carbon emitter RWE is now below the 30% threshold for revenue and power production. However, the utility still holds over 10 gigawatts of installed coal power capacity and mined over 50 million tonnes of coal in 2020.
“Equally gigantic coal producers like Glencore, Anglo American or BHP Billiton fall comfortably below the 30% threshold while being major climate wreckers. The policy foresees regular reviews, so the next update must include an absolute threshold if Allianz Global Investors want to be taken seriously in its climate protection efforts,“ said Richter.
The enhanced policy will become effective starting in December 2021 for AllianzGI’s existing funds and will be the default policy for all new funds and mandates after this date.
AllianzGI will seek the consent of clients for the application of the policy to sub-advisory mandates and institutional vehicles.
Deborah Zurkow, global head of investments, said: “With this new coal policy, our aspiration is to position our portfolios on a trajectory towards climate transition, and we are confident that this will match our clients’ expectations.”
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