"Today, we have the historic opportunity to set the course for sustainable growth. But  public budgets are limited. Therefore, we must mobilize private capital to facilitate economic recovery and meet social goals," says Ludovic Subran, Chief Economist of Allianz. "A clear link between climate targets and support through investment programs will result in more resilient structures, long-term competitiveness and higher employment." 

According to a report published today by Allianz Research and WWF Germany, stimulus measures that only focus on short-term economic recovery and neglect social and environmental impacts will result in avoidable deadweight losses for economies in the coming decades. The authors point to effective steering instruments and levers which support a rapid economic recovery and simultaneously contribute to climate protection. This also applies to relief measures already granted; with appropriate regulatory extensions, the transformation towards a low-emission economy could be significantly accelerated.  

Matthias Kopp, Director Sustainable Finance at WWF Germany, says:  "Society will have to bear the costs of the current economic stimulus packages. Thus, these funding programs need to reflect what is at stake for future societies, from today and in the long term. Only a climate-friendly economy can sustain our economy’s competitiveness and safeguard our livelihoods."

Allianz Research and  WWF Germany therefore call for some basic principles to be anchored in the design of economic stimulus packages:

• The support should be linked to climate targets which are in line with the development paths of companies and lead to climate neutrality before 2050.
• Companies should develop paths to climate neutrality and define clear milestones.
• Achievement of objectives and implementation of strategy should be measured
  based on of credible indicators.

The climate experts of Allianz Research and  WWF Germany have also identified five areas deemed to be particularly effective for the design of an economic stimulus package with an effect towards more sustainability. These areas achieve strong positive climate impacts as well as a high macroeconomic multipliers of 2.5 to 3.0 euros per 1.0 euro economic stimulus spent. The Federal Government's economic stimulus package addresses many of these areas, but can only unfold its full effect if the necessary complementary private capital can be mobilized.

1. Incentives for physical infrastructure investments in renewable energies, storage, transmission and distribution network modernization and CCS/CCU
2. Energy and climate-related building modernization in accordance with the Paris Climate Targets
3. Education and training to mitigate the effects of structural change,
4. Financing approaches for securing livelihoods, natural CO2 storage and
   climate-friendly agriculture,
5. Financing approaches to promote research and development on climate neutrality.

Long-term and reliable investment planning for more sustainability is key to mobilizing additional private capital. Development paths to climate neutrality at the company level can make an important contribution to this.