"We now have three times the market power"

Günther Thallinger

The 47-year-old has to make the Allianz portfolio climate-neutral.

(Photo: picture alliance / SvenSimon)

Günther Thallinger currently has one of the toughest jobs at the alliance, The 47-year-old Austrian has to rebuild the enormous portfolio of the alliance in such a way that it is climate-neutral in three decades. It is about 800 billion dollars.

His boss Oliver Bäte accompanies the graduated mathematician on Monday to New York. There, Bäte introduces the new "Net Zero Asset Owner Alliance," an alliance of twelve major global investors, all of whom want to have their portfolios climate-neutral by 2050.

Mr. Thallinger, what is changing with the "Net Zero Asset Owner Alliance" compared to the status quo at Allianz? It has been known for some time that climate neutrality for all asset classes should be achieved there by 2050.
What's new is that a group of twelve investors are now committed to this idea. Just as there is at the state level since 2015 with the Paris Climate Agreement. Such a process is very time-consuming, if everyone does it for themselves. As a group of investors, however, we have three times more market power than Allianz alone. On the other hand, the public limited companies have a common contact in their quest for more environmental friendliness.

It is now their responsibility to change the $ 800 billion in Allianz assets alone. How should this work in practice?
We committed ourselves to this idea last year. It is important that the portfolio develops. This requires the commitment of the companies in which we have invested. There will therefore be an even more intensive exchange in the future. There we will clearly communicate our ideas.

Today, it can already be predicted that some industries will never be climate neutral due to their high energy intensity. Do you then throw these stocks out of the portfolio?
Clearly, a cement manufacturer will never reach the goal of carbon neutrality. But we have to get him to reduce his emissions as well. On the other hand, we then need climate-neutral investments for these stocks, so that the overall portfolio is at zero.

What are climate-friendly investments?
For example forest. Here we would have to build a respectable position according to the current state. That's a challenge, but not unimaginable.

What are the other challenges in practice?
As a group, we need to be clear about how we measure the emissions of an investment. This is relatively easy for stocks. If we hold 0.3 percent of a company, then we take its output times 0.3, so we know our share. For bonds this is more difficult, here we have to find a basis with our partners.

The group now consists of a dozen investors with market power of $ 2.3 trillion. How should it continue?
Our goal is to have more members join us soon and then we will pool $ 5 trillion and eventually $ 10 trillion. That would be one fifth of global investments. Then the market power would be big enough. But it is already a great success that well-known investors from North America are present who have not been so far ahead of these goals. It is possible that societies from Japan could join soon, there they are still in the vote.

What is the role of international politics in this process?
The Asset Owners Alliance has emerged under the umbrella of the United Nations. The UN General Assembly also wants to expand the group. It will be important for their success that they remain extremely close to the governments and political authorities.
Mr Thallinger, thank you for the interview.

More: Under the name "Net Zero Asset Owner Alliance", a dozen global investment companies are committed to making their portfolios climate-neutral by 2050. Read more here.

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