Insurer in renewable power investment as it ramps up decarbonisation efforts

Insurance giant AXA has announced today that it has signed a ten-year Virtual Power Purchase Agreement (VPPA) with IGNIS, a Spanish integrated renewable energy group as part of its efforts to enhance its involvement in the renewable energy sector.

The underwriter said a VPPA makes it possible both to contribute to the equivalent of all or part of a consumer’s energy needs and to supply the grid with renewable electricity.

The contract signed by AXA concerns a solar power plant in Spain, where construction will begin shortly, with the objective of being operational by May 2025.  Under the agreement, AXA will purchase 90% of the renewable electricity produced by the power plant which equates to 84 GWh per year. This is equivalent to the electricity consumption of the buildings and data centres of the Group’s European entities.

“The energy consumption of our buildings and the digital sector currently account for the largest share of the carbon footprint associated with our own operations. The environmental impact of this contract will be significant, as 75% of the electricity consumed by the Group’s buildings and data centres is located in Europe. By signing a VPPA on this scale, AXA is confirming its climate ambitions by decarbonizing, among other things, its activities in these areas,” said Alexander Vollert, group chief operating officer and CEO of AXA GO.

“Thanks to this new initiative, AXA will further exceed its target of reducing CO2 emissions from its operations by 20% by 2025. By promoting the development of renewable electricity in the European mix, AXA is further demonstrating its full commitment for the transition to a low-carbon economy,” added Ulrike Decoene, AXA’s group chief communication, brand and sustainability officer.

It comes days after the group publishing targets to drive the decarbonisation of various of its Property & Casualty insurance portfolios and to develop its insurance activities dedicated to the transition.

The targets, include :

  • Increasing its business in the field of renewable energies, and more broadly across sectors transitioning to low carbon business models, as well as developing environmentally sustainable claims management for its motor business by 2026.
  • Reducing the carbon intensity of the most material personal motor portfolios in the Group by 20% by 2030 compared with the 2019 baseline.
  • Reducing the absolute carbon emissions of the Group’s largest commercial insurance clients by 30% and the carbon intensity of other corporate clients by 20% by 2030 compared with a 2021 baseline.
  • Strengthening dialogue with its customers, particularly its corporate customers, but also with its external stakeholders and partners to better support them in the transition.

These targets are based on new calculation methodologies developed and promoted by the sector AXA added.

It is to enhance its efforts to reduce the carbon footprint of its investment activities. After setting a target of reducing the carbon footprint of AXA’s general account assets by 20% between 2019 and 2025, AXA is setting a new target of a 50% reduction between 2019 and 2030. It also intends to strengthen its engagement activities and its efforts to finance the transition.

AXA CEO Thomas Buberl (pic)  added: “These targets demonstrate our determination to pursue our commitment towards climate change.

“The indicators in our Climate and Biodiversity report indicate the progress made, but also the efforts that are still required in terms of access to data, strengthening measurement and modelling methodologies, and the importance of accelerating the pace of the transition.

“As insurers, we see the increasing risks that climate change and the loss of biodiversity pose to our economies and societies, and how they are intensifying. We will continue engaging with our clients and our stakeholders leveraging all the levers at our disposal, from prevention to investment, from the financing of scientific research to insurance, as well as partnerships and collaboration with private and public players.”