Nationale Nederlanden, a Dutch insurance and asset management company active in 18 countries in Europe and Asia with EUR 260bn AuM, has announced a new coal exclusion policy for underwriting and investments
The policy will exclude underwriting and proprietary investment in mining companies that derive more than 30% of their revenue from coal extraction, and of power companies that produce more than 30% of their power production from coal. Nationale Nederlanden also commits to phase out coal from its proprietary investment portfolio by 2030 and only provide new insurance cover to clients that have 5% or lower exposure to coal-related activities by 2030.
The NN Group has EUR 260bn AuM, including EUR 87bn AuM on behalf of clients, and the new policy will affect EUR 540m worth of coal investments. NN will apply the coal power and mining exclusion to its own assets and will encourage its clients to implement the coal mining restriction to the assets NN manages in a discretionary way. The NN Group also published an exclusion list of 36 coal mining companies, citing concerns about climate as the main reason for exclusion.
However, many companies are involved in both coal power and mining activity, and it remains uncertain how NN will implement the policy in these cases. For example, NN is one of the biggest investors in Polish coal, with EUR 398.4m investments. PGE, a Polish coal company, is one of the biggest coal plant developers, is also planning an expansion of the Turow mine. The policy does not specify whether NN will exclude PGE and other such companies. Furthermore, the policy does not prevent NN from investing in companies planning new coal plants with a coal exposure below 30%.
By committing to gradually reduce the exclusion threshold for power companies from 30% to 0% by 2030, NN is the third insurer, after Allianz and Hannover Re, to commit to fully phase out its own assets. The deadline of 2030 is aligned with climate science goals to keep global warming below 1.5°C.
"NN Group is phasing out coal investments -- a smart move in times when the public’s call for climate action is unmistakable; losses from extreme weather events are rising for insurers, and the cost of coal is increasing and costs of wind and solar energy rapidly declining. NN Group is sending a clear message to the financial sector: Investments in coal are outdated and irresponsible. Financial institutions need to walk away from coal and stop investing in burning the planet."
"Despite a lack of commitment to implement the policy for all assets managed for third-parties, Nationale Nederlanden is clearly showing the way that other insurers must follow. We have very little time to prevent runaway climate change and insurers need to tackle their support for fossil fuel on both sides of their business. After having adopted an already strong policy on tar sands, Nationale Nederlanden is now showing leadership once more with a science-based commitment to totally phase out coal from its proprietary investment and insurance portfolios by 2030. There is now a clear gap between it and other insurers such as Aegon and Aviva, which remain big drivers of the coal expansion."