Investments in Kenya and India to offset CO2 emissions

For an insurance provider and asset manager like Allianz, climate change is real. Allianz has committed to a carbon reduction strategy and has for the first time fully neutralized carbon dioxide (CO2) emissions stemming from its operations in 2012. Roderick MacDonald and his team have developed the co-financing strategy for carbon projects. Karsten Löffler directs climate-related strategies. In an interview, they explain why climate change can be a business case.


2012 was the first year that Allianz as a Group fully neutralized its CO2 emissions. What is the aim of this strategy?

Karsten Löffler: The neutralization activity, which is supported by avoiding, reducing and substituting emissions where possible, is part of our wider climate change strategy. We have a target of reducing our emissions per employee by 35 percent by 2015 compared to 2006. Neutralizing our remaining emissions is a logical next step. Offsetting emissions is usually done through purchasing carbon certificates that guarantee emission reductions in developing countries where opportunities to abate CO2 are abundant but financial means are scarce. But we have opted to go a step further by directly investing into such projects.


So, what is the advantage of investing directly in carbon projects?

Roderick MacDonald: We could have just gone out into the market and bought the necessary number of CO2 certificates. Prices have dropped significantly and, at least from today’s perspective, we could get very good deals. But we strive to have a real impact in areas that are fundamental to the future of our planet and, at the same time, present a sound business case. So we have put time and care into selecting and co-financing the very best projects out there. In return, we get our own carbon credits and, if necessary, we can purchase additional credits from the carbon market.


What projects have you selected for neutralizing the Group’s CO2 footprint?

MacDonald: We have assessed many proposals, some of them were very good, but government approval processes can be long and circumstances have not always been supportive. For the time being, we have selected two projects – one in Kenya and one in India. In Kenya, we invested in a company that undertakes forest conservation in combination with development initiatives for the local population. The first project will prevent the emission of 36 million metric tons of CO2 – about 100 times the annual emissions of the entire Allianz Group. In India, we co-finance a set of energy-efficient lighting projects. They will help reduce residential energy consumption and avoid the annual equivalent emissions of 1 million cars in Germany.

Karsten Löffler
Karsten Löffler

What are the critical emission sources within Allianz and what do you do to reduce them in an efficient manner? 

Löffler: 98 percent of the Group's emissions come from energy, travel and paper, so the focus of our carbon reduction activities is on these areas. We have developed global policies to manage and reduce consumption, which in turn support the avoidance, reduction and substitution of emissions. For instance, our Green IT Hardware Purchasing Policy ensures that we purchase energy-efficient devices and that “Energy Star” and “EPEAT” are Group-wide standards for all IT purchases. We also have put efforts in raising awareness among our employees through interactive and engaging campaigns.


Does this also bring advantages for Allianz customers?

Löffler: We believe climate change is providing opportunities and threats at the same time. We capitalize on the first, for instance by being one of the largest renewable energy investors and through our carbon projects, and strive to protect our clients against the latter. We offer our customers over 130 green products and services across the entire business spectrum, e.g. green building insurance to cover facilities or offices that have been built or refurbished to be more energy-efficient.


What is going to be the future focus of Allianz’ climate engagement?

Löffler: Despite the lack of progress in international climate change negotiations, we see evidence of increasing regional, national and sub-national efforts towards introducing climate change legislation. This is particularly striking in Europe, but also in countries like China. There is a general sentiment that the economic costs of non- or delayed-action outweigh by far the costs of taking the necessary measures today.


MacDonald: The striking impact of climate change on weather patterns, biodiversity or water supply means that there is a strong economic rationale to be at the forefront of efforts in this area for an insurance and asset management company like Allianz. This is also the reason why we find it worthwhile to pursue direct carbon investments in key areas of climate protection. At Allianz, we seek to meet the rewarding challenges of the future today.

Roderick MacDonald
Roderick MacDonald

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Nicolai Tewes
Allianz SE
Phone +49.89.3800-4511
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