Munich Re Will Limit Investments in Companies that Derive Profits from Coal

Munich Re, one of the world’s largest reinsurance companies, announced on August 5 that it will limit its investments in the stocks and bonds of companies that derive more than 30% of their business from burning coal.  In doing so, it is joining with several other major insurers who have adopted similar policies, including Axa, Allianz, and Zurich.

“In the individual risk business, where we can see the risks exactly, we will, in the future, in principle no longer insure new coal fired power plants or mines in industrial countries,” says Munich Re CEO Joachim Wenning in a commentary published in German daily newspaper Frankfurter Allgemeine Zeitung on Monday.

The new policy may mean Munich Re gives up millions of dollars in premiums that would otherwise come its way, but Wenning says it is all part of a corporate policy to support the objectives of the 2015 Paris climate accords.  Call it short term pain for long term gain.  The company believes its losses in revenue today will be more than offset by the economic benefits of not turning the Earth into an uninhabitable cinder in the future.  CNBC reports a big factor in the new policy is pressure from institutional investors to divest from companies whose business activities are contributing to climate change.

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