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Allianz and AXA: An embarrassing affair with RWE

This weekend, thousands of activists from all over Europe are occupying RWE’s Hambach site, a giant open-pit lignite mine in North Rhine-Westphalia in Germany. Called Ende Gelände, this huge annual mobilization has become a symbol of the fight against fossil fuels.

RWE is the world’s largest producer and operator of lignite, the dirtiest form of coal, and it’s also the leading European producer of coal-fired electricity. RWE is Europe’s largest CO2 emitter, with 111 million tonnes of CO2 emitted in 2017 from its coal-fired power plants; its coal fleet is also estimated to have caused 1855 premature deaths in 2015 alone.

Despite the IPCC’s unequivocal warning on the seriousness of global warming beyond 1.5°C and the urgent need to act, RWE and other coal, gas and oil companies continue to expand the frontier of fossil fuels.  This year, Ende Gelände possesses even greater significance as RWE intends to clear the remaining 10% of the Hambach forest, one of the few ancient forests left in Europe, to extract more coal from it – while Germany discusses a coal phase-out date.

What is at stake is huge: RWE’s expansion of the Hambach and close-by Garzweiler mines has already led to the destruction of 90% of the Hambach forest and to the forced displacement of 30,000 people. Now, each lump of coal produced, each tonne of coal burned, brings the world a step closer to runaway climate change. In an attempt to prevent irreversible impacts, activists are fighting RWE from all sides, on the ground, in court, and on the economic and financial frontlines, calling on RWE’s investors, banks and insurers to cut their ties with the company. We set out some of the numerous reasons to end any support for RWE in our blog ‘10 reasons to break free from RWE’.

As with any other coal project and company worldwide, the Hambach mine and RWE could not operate without insurance. We know insurance makes RWE’s coal lunacy possible, therefore insurers could push RWE to phase out its coal business. A growing number of insurers have in fact pledged to divest and restrict their insurance support to the coal sector, thanks to pressure by civil society and the NGOs of the Insure Our Future campaign. Insurance giants Allianz and AXA boast of being among the first to restrict their support to coal and to lead the industry on the topic.

In December 2017, AXA’s CEO statedWe have made some pioneering moves since 2015, notably by starting to divest from coal […] today, in the spirit of the Paris Agreement, we want to accelerate our commitment and confirm our leadership in the fight against global warming”. Similarly, Allianz’s CEO stated in May 2018 the company would be willing to cut the biggest climate killer [coal] out of the core business over time. We are getting even more serious on global warming” and “if we are not leading the charge against climate change, who would otherwise do that?

However, despite these strong words against coal, Profundo has unearthed new financial data  that shows that both Allianz and AXA are still investing millions of dollars in RWE, seriously undermining their claim to be climate leaders. Not only have they failed to stop insuring coal companies, unlike the Swiss insurers Zurich and Swiss Re who have taken this significant step, but both AXA and Allianz are still giving cash to a company supposedly covered by their divestment policies.

RWE should have been excluded from Allianz and AXA’s investment portfolios since November 2015 and December 2017 respectively. But the former has invested around $46 millions in RWE since 2016 while the latter has bought RWE assets worth $29 million in 2018. In total, both have invested more than $102 million in bonds and shares in RWE since 2016. New data will soon show that both companies also made other significant coal investments during this period.

So what happened? Are AXA and Allianz deliberately violating their pledges or are there massive gaps in their policies that need to be closed? Regardless of the reason, the two insurers need to do better if they are serious about being part of the climate solution. They are the two biggest insurers in terms of assets under management and their investment choices can make a real difference on the ground now and on climate in the long term.

On the other side, AXA and Allianz have both thousands of clients that abide by their pledges. As the Norwegian pension fund Storebrand stated, RWE shares are poisoned with coal and must be sold. Activists at the Ende Gelände are standing together today to call on the two insurance giants to drop RWE for good. Tomorrow, they will all be back home and could call their families and relatives to also start pushing both AXA and Allianz to fix the embarrassing gap between their words and actions.

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