Talanx Looking For Gradual Exit From Coal/Oil Coverage

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The Talanx Group significantly sharpened its sustainability activities over the past year. Its eighth sustainability report, which is published today, focuses on the Group’s role in supporting the industry and the economy in their sustainable transformation. The core long-term goal is to achieve net zero by 2050.

This is why Talanx has resolved new exclusions in its underwriting business, among other things: additional restrictions on insurance for new oil and gas projects will be introduced with effect from 1 July 2023; a multi-stage reduction path has been drawn up detailing the Group’s withdrawal from thermal coal by 2038. In addition to the environmental topics, the Group also increased its focus on social and governance aspects in the reporting period.

“Sustainability is a core component of our Group strategy: we aim to live up to our responsibilities and play our part in ensuring a sustainable future. As an insurer and investor, we are actively supporting our partners in the industry as they transition, and hence promoting sustainable structural change”, said Torsten Leue, Chairman of Talanx AG’s Board of Management. “We are taking the next ambitious steps to underpin this aspiration by introducing new underwriting exclusions, comprehensively including ESG criteria in our investment activities, and consolidating and expanding sustainable structures within our Group.”

Extended exclusions substantiate position in underwriting

Talanx’s additional exclusion policy in relation to the underwriting of new oil and gas projects on an individual risk basis, which was resolved at the beginning of the year, will take effect on 1 July 2023. As of that date, the Group will no longer provide insurance policies for new greenfield upstream oil and gas projects.

In addition, it will no longer insure new midstream projects for pipelines and tank farms (new and stand-alone) that are directly linked to greenfield upstream oil developments. It will also exclude insurance cover for any stand-alone oil-fired power plants which have not yet been under construction or operation as of 1 July 2023. In the Arctic region, the exclusion of new oil and gas drilling projects is extended to new covers for existing projects. Equally, the Group will exclude deep sea mining project risks from underwriting as of 1 July 2023.

Prior to this, Talanx had already defined insurance exclusions for fossil fuels. With effect from 2038, the Group will no longer insure any thermal coal infrastructure or business models based on oil and tar sands, which are particularly harmful for the environment. The withdrawal from thermal coal was set out in more detail in 2022 in a multi-stage exit plan, which defines milestones on the reduction path up to 2038.

Internal assessment methodology strengthens sustainability in asset management

For investment decisions relating to Talanx’s own holdings, the existing restrictions for business models based on thermal coal or oil and tar sands have been complemented: As of the reporting period, no investments shall be made in companies involved in new greenfield Arctic drilling projects. Therefore, the screening process excludes those issuers from investment that generate 10% or more of their revenue from offshore oil and gas extraction within the Arctic Circle (66° 34’ N).

A new internal assessment methodology was introduced in 2022 in order to assess the ESG profile of liquid investments. This approach provides support for the Group’s investment strategy and helps Talanx fulfil its role as a responsible investor, e.g. during structured dialogues with issuers.

The Group has set itself the goal of reducing the carbon intensity of its liquid portfolio under own management by 30% versus the 2019 baseline in the period up to 2025 – and it already achieved a reduction of 20% compared to 2019 in the reporting period. The goal of expanding the volume of sustainable investments to EUR 8 billion3 – originally a target set for 2025 – was met for the first time in 2022. In addition to its investment activities in the area of renewable energy sources, the Group is helping to implement the transition to a sustainable transport system by investing in modernisation projects for the public transport infrastructure, and is promoting effective, low-emissions public transport.

Talanx maintains reductions in its own environmental footprint

Reducing its own carbon footprint is a high priority for Talanx. The Group has been climate neutral (including offsetting) in its own operations in Germany, where more than 44% of its global workforce are employed, since 2019, and plans to achieve this milestone worldwide by 2030. In addition, Talanx has set itself the goal of cutting carbon emissions from its German operations (Scope 1 and 2) by 25% versus the 2019 baseline by 2025. The Group was able to maintain the clear drop in emissions that it achieved in the previous years even after the end of the restrictions caused by the pandemic. In addition, a pilot project for switching the company’s car fleet to e-mobility vehicles is helping to transition to green energy in its operations.Social focus and corporate governance: sustainable structures strengthened

The Group also deliberately strengthened its social focus in the reporting period as part of reviewing its sustainability strategy. In addition to its “Employee’s Journey”, which is aimed at the own workforce, the Group is concentrating on “Diversity, Equity & Inclusion”, as well as on projects promoting access to education and infrastructure. By doing so, Talanx is providing a strategic framework for its social activities, most of which are organised on a local basis.

As an integral part of the Group’s business strategy, sustainability is also firmly embedded in its governance structures. Two Supervisory Board members have been appointed as sustainability experts. In parallel, the divisions are reinforcing the importance of sustainability by expanding their own ESG teams.

About alastair walker 12131 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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