Otto Steinmetz, Chief Risk Officer of Dresdner Bank and head of the Expert Group on Climate at Allianz, speaks about new business areas, customer-oriented product packages, and climate protection goals.
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Otto Steinmetz, Head of the Allianz Climate Core Group |
Last year Allianz presented a climate study carried out in cooperation with the World Wide Fund for Nature (WWF). And in January of this year Allianz adopted a climate strategy. Why is the climate becoming an important issue?
As an international financial group, we are also directly affected by climate change - on the insurance side by liability for climate-induced claims, and on the banking side by a reduction in borrowers' ability to pay and impairment of collateral. That's why we decided to address the issue proactively for ourselves and for the benefit of customers by developing a comprehensive Allianz climate strategy.
In the course of developing this climate strategy, Allianz has drawn up a "road map". What does that entail?
In the context of efficient cost and risk management, we are looking at how the risks of climate change might impact on our existing business activities. Above all, we are evaluating how to bundle our climate-related activities within Allianz, and implement them to generate income.
We already address climate change in virtually all our business areas - ranging from insurance, through banking and asset management, to investment activities.
Essentially, we focus on three areas: renewable energies, emission trading, and building finance. As an integrated financial services provider, we believe that we are in a position to offer innovative and customer-friendly concepts in these areas.
What are the strengths of Allianz in these areas - especially compared to competitors?
Dresdner Bank is already Germany's market leader in emission trading. Fifty-three percent of domestic companies trading in emission certificates are our customers. Together with its investment subsidiary Dresdner Kleinwort Wasserstein, Dresdner Bank also advises about 150 large and medium-sized companies, as well as private investors. We want to expand this leadership role, particularly in connection with EU emission trading, which has been in operation since 2005 and will enter its second phase in 2008.
We are currently also evaluating potential insurance products in this area and are taking a proactive approach to emissions-related investment. For example, the French Allianz subsidiary AGF has invested some ten million euros in the emission fund European Carbon Fund during the last few years.
Is the increased commitment also directed at the renewable energies sector?
This market has high annual growth rates of 20 to 25 percent, and is becoming increasingly profitable. That is why the expansion of our expertise in this sector is strategically important for us. We are planning a substantial expansion of our business activities in this area. For that reason, we have established the Center of Competence for Renewable Energies at Dresdner Bank.
Which markets are particularly attractive in this area?
Renewable energies are especially interesting for our own private equity activities. During the next five years, our subsidiary "Allianz Specialized Investments" will invest between 300 and 500 million euros in this area - primarily in solar and wind energy. In December of last year, we invested in a wind park on Sicily.
There are lots of exciting markets in Europe. Apart from Italy, the governments of Spain, Greece, France and the United Kingdom are all interested in promoting wind energy.
In Germany, amendments to the Renewable Energies Law from July 2004 mean that we are also experiencing a boom market that is by no means restricted to wind energy. Currently 60 percent of all enquiries received by our Center of Competence for Renewable Energies relate to the area of bioenergy (biogas and biomass).
There are indicators that a similar development is underway for geothermal energy. Investments of between five and seven billion euros are anticipated in Germany alone over the next few years. Other EU countries are also expected to see further substantial investment volumes. We therefore regard this as an area with massive development potential.
How is Allianz approaching the issue of climate change internally?
Our climate road map does more than place very high demands on developing commercial solutions for our customers. We have also set ambitious goals for our own business processes.
By the year 2012, we are planning a 20-percent reduction in our carbon dioxide emissions compared with the base year 2000. This puts us at the top of the "Climate Leaders" category in the index of the Carbon Disclosure Project (CDP) - a global initiative of institutional investors for the publication of carbon dioxide emissions by the biggest companies worldwide.
What can customers expect from Allianz in the future when it comes to the issue of climate change?
Let's take the example of renewable energies. We are able to provide customers with support in financing their projects, as well as offering insurance coverage. All this is based on the know-how and technical expertise of the Allianz Center for Technology. Customers receive one-stop advice, and are able to rest assured that the individual components of the overall package provide an optimum fit.
We place customers at the center of our climate strategy, and want to provide them with comprehensive support. The networking capability of our corporate divisions and business activities means that we're in an outstanding position to deliver what our customers require.
editor: Julia Leuffen
publishing date: June 19, 2006
