Investors are increasingly using their financial muscles to reward companies that limit their investments towards fossil fuel companies.
On Monday, the world’s biggest reinsurer, Munich Re, stated it will stop investing in shares and bonds of companies that generate more than 30% of their revenues from coal-related business, said Joachim Wenning, Munich Re’s CEO.
“In the individual risk business, where we can see the risks exactly, we will in future in principle no longer insure new coal-fired power plants or mines in industrial countries,” said Joachim Wenning to German daily Frankfurter Allgemeine Zeitung.
Policymakers are pushing corporates to do their bid to meet their commitments made in the landmark 2015 COP21 accord which limits global warming to below 2 degrees Celsius.
Investors are increasingly using their financial muscle to reward those at the forefront of that transition.
In July, Swiss Re, the world number two by share value, stated it would not reinsure any company for which thermal coal represents more than 30%, mirroring the move of its French peer – Scor.
Despite being a vocal supporter of the Paris deal, Munich Re had said as recently as last month that it did not plan to copy Swiss Re in limiting its underwriting of coal companies.