Allianz has a long history of
investment in environmentally friendly assets, particularly wind
farms and solar energy facilities. It has now broadened the scope
of its investments with the acquisition of a 10% stake in Wildlife
Works Carbon (WWC), a developer of projects reducing carbon dioxide
(CO2) emissions resulting from deforestation and forest
degradation.
Investment manager of
Allianz’s climate solutions unit Martin Ewald commented: “Allianz
considers REDD [reducing emissions from deforestation and forest
degradation] an attractive investment option because it opens up
access for us to major growth markets, and will generate
competitive returns through the sale of CO2
certificates.”
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Ewald said that in addition
to Allianz’s investment in WWC it has also secured the rights to
emission certificates from WWC projects in Kenya. This, he said,
will contribute towards neutralising a portion of Allianz’s own
CO2 footprint from 2012 onwards. A first project in
Kenya will prevent the emission of 36m metric tons of
CO2 – an amount equivalent to about twice the annual
CO2 emissions of the City of Berlin – over its lifespan
of more than 30 years.
In short, a CO2 certificate
system was launched in 2005 to regulate European greenhouse gas
emissions. Only companies in possession of the appropriate
certificates may generate CO2 emissions. European
emission certificates (EUA) can be traded like stocks and to this
end the European Union Emission Trading Scheme was introduced. A
reduction of 1 metric ton of CO2 emissions generates one
emission certificate that meets the requirements of the Voluntary
Carbon Standard and the Climate, Community and Biodiversity
Alliance.
Ewald added that REDD is an
increasingly attractive investment class for institutional
investors, and especially financial investors.
“Demand for sustainable
investments has risen sharply in the past few years because of
their long-term investment horizon and high level of social
impact,” Ewald said.
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By GlobalData“The number of companies and
private individuals who would like to neutralise their emissions on
a voluntary basis will also grow in the long term, increasing the
demand for emission certificates.”
According to news agency Bloomberg, the value of carbon
emission certificates and rights traded throughout the world in
2010 was $120bn.
