Generali Insurance: Coal investments ⇓ € 2B, Green ⇑ € 3.5

The world’s 8th largest insurance company, Generali, has announced that it will divest itself of $US2.4 billion in coal investments and increase its investment in green energy $US 4.3B by 2020.

Group CEO Philippe Donnet stated: “With this action plan, which follows a series of initiatives undertaken in the last several years, the Company strengthens its leadership position as a responsible business, to contribute to a healthy, resilient, and sustainable society.”

Generali is not a newcomer to clean energy.

They were there in Paris in December 2015 for the ‘The Paris Agreement‘ – the UN’s COP21,  21st Conference of the Parties on climate change.

Their Commitment to the Environment and Climate statement says: We feel obliged to act on various fronts: we are committed to reducing our direct impact in an optimal manner. Furthermore, using suitable measures we can encourage the adoption of environmentally sustainable behaviour in our spheres of influence, particularly those of our clients and the companies in which we invest, in order to reduce the indirect impact of our activities.

What does it actually mean?

The Board of Directors of Generali has agreed that
Generali will not make any new investments in businesses associated with the coal sector. With reference to the current exposure to the coal sector, equivalent to approximately € 2 billion, Generali will dispose of equity investments and gradually eliminate bond investments by bringing them to maturity or considering the possibility of divesting them before maturity.

In regards to ‘green’ investment, part of their statement reads:
Investments in “green” sectors will be increased by € 3.5 billion (mainly through green bonds and green infrastructures). Generali will monitor the action plan annually to assess if it is being properly implemented and possibly raising the objectives.

The company will also increase the green aspect of its underwriting, specifically
The offer of products with environmental value (e.g., sustainable mobility and energy efficiency) for the retail market and SMEs will be increased. 

What will €3.5B/$4.3 $US buy in green energy?

It’s a lot. While it’s difficult to get exact figures for how much green facilities cost, the largest solar farms in China and India cost about $1B each (Longyangxia Dam Solar Park in China, The Kurnool Solar Plant in India) as well as Nevada’s Crescent Dunes solar thermal facility. If you stretch the budget a bit, you can throw in the world’s largest wind farm: The London Array at €2.2B/$2.7 $US.

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