Forest protection projects compensate for Allianz CO2 emissions

Allianz has been climate-neutral since 2012. Since 2006, Allianz has been able to reduce CO2 emissions by 37.2 percent per colleague. Reduced energy use and travel both helped improve the CO2 balance in 2013. The remaining 342,725 tons of CO2 will, for the first time, be fully offset by forest protection projects, co-developed and financed by Allianz. An interview with those responsible for these projects at Allianz.

 

Martin Ewald, you are responsible for the investments in forest protection projects. It took many years to realize your investment in Rimba Raya. Now, this area of Borneo is the largest certified forest protection project worldwide. Is such an outlay worthwhile?

 

It was touch-and-go with the Rimba Raya project in Borneo on many occasions. Shortly after our first visit in 2010, the government decided to reduce the size of the area which had just been approved. We were competing with influential palm-oil interests. There are many reasons why we were able to win out in spite of this. As well as the tireless work of the project developer Infinite Earth, there was also the prospect of financial support from Allianz. In the meantime, the IT giant Microsoft has also invested, along with many others.

 

Rimba Raya is already Allianz's second investment in forest protection. We have been able to show, through our commitment, that the REDD (Reducing Emissions from Deforestation and Degradation) mechanism – which certifies forest protection projects according to transparent standards – can function not only in Africa, but also in other areas where economic interests and climate protection come into conflict.

 

It also provides a long-term perspective for the people and nature locally. The project area offers a protection zone for a neighboring national park that is home to the Borneo Orangutan which is facing extinction as well as to many other rare animals and plants. In addition, the project finances a sustainable livelihood for the local people, as it has prevented the resettlement of 14 communities, and funds from the project are earmarked for building schools and for providing training measures, among other things. So it’s about a lot more than just forest protection.

Martin Ewald: “It’s about a lot more than just forest protection.”
Martin Ewald: “It’s about a lot more than just forest protection.”

Karsten Löffler, you oversee the implementation of the climate change strategy for Allianz SE. How is forest protection, of all things, consistent with Allianz's climate strategy? Do you just want to send out a signal?

 

Climate change affects us directly, as a globally operating insurance company. For a long time now, we have already been observing an increase in climate-related damage caused by natural hazards. In the future, extreme weather events will become even more extreme as a result of climate change.

 

Investments in projects such as Rimba Raya show that climate protection pays off. Forest protection can be profitable and, at the same time, can offer the local people alternative development opportunities. Admittedly, Rimba Raya is just a drop in the ocean if climate protection is not pushed forward more ambitiously at the national and international level. Forests store around 25 percent of the CO2 captured in the Earth's biosphere. The particularly critical aspect of deforestation in Indonesia is the drainage of the swamps. This releases methane - a greenhouse gas approximately 20 times more harmful than CO2. If we don't take action now, the United Nations claim that over 98 percent of Indonesia's forests will be threatened with deforestation and slash-and-burn within just a ten-year period.

 

The loss of these forests is irreversible, and happens incredibly quickly. However, without economic alternatives, such as the funding of forest protection within a UN mechanism, combined with ambitious climate goals in industrialized nations, it will just continue. Palm oil continues to be a key component of foodstuffs consumed by large parts of the world's population, particularly in developing countries. As a financial investor and insurer, working primarily over long cycles, such timeframes are the necessary evaluation period, which is why we are also particularly active in forest protection.

 

Mr. Löffeler, the risks of climate change are clear to most observers. Why is Allianz also talking about opportunities?

 

First and foremost, climate change is a global risk for humanity and its manifestations are, as before, very uncertain. This means that, even if we are certain that climate change is occurring and that we are the cause of this, we still know too little about the system's tipping points. These can result in catastrophic impacts as soon as they are exceeded. This may be, for instance, that the monsoon fails in Asia, or that the Gulf Stream "switches off", leading to dramatic changes in temperature and weather in Europe and North America. This winter's arctic temperatures in parts of the US, and the floods in England following "once in a hundred years" storms and rainfall, are a taste of things to come.

 

Nonetheless, the opportunities are very clear to us. We now have the possibility of counteracting this. The energy transformation in Germany is often criticized, but it offers the opportunity to develop new technologies which not only make our energy system more climate-friendly, but also guarantee our energy security for the future. In addition, German expertise in this area is becoming a major export success. We therefore also see business opportunities in developing ecological products, for instance in the area of electromobility, but also in insuring renewable energies or storage technologies.

Karsten Löffler: “Investments in projects such as Rimba Raya show that climate protection pays off.”
Karsten Löffler: “Investments in projects such as Rimba Raya show that climate protection pays off.”

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Nicolai Tewes
Allianz SE
Phone +49.89.3800-4511
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