Insure Our Future calls on firms to “immediately” stop covering carbon projects

 28th March 2023 - Author: Kane Wells

The Insure Our Future network has penned a letter to the CEOs of 30 major insurers demanding they “immediately” stop the offering of any insurance services which support the expansion of coal, oil and gas production.

Insure Our Future, a global syndicate of activists, sent the letter to a host of major insurance companies whose policies they rank annually.

Among these are AIG, Allianz, AXA, Chubb, Generali, Liberty Mutual, Lloyd’s of London, Munich Re, SCOR, Sinosure, SOMPO, Tokio Marine and Zurich.

The activist network notes that urgent action to scale up efforts to avert what it describes as “an unmanageable climate breakdown” is needed across society.

According to Insure Our Future, re/insurers play a critical role as risk managers and have a special responsibility to drive change in the energy sector through the insurance and investment decisions they take.

The network explains that in the last few years, many insurers have adopted policies which have helped accelerate the shift away from coal, with some recently having started to adopt policies to exclude new oil and gas projects altogether.

The group notes that this is a “welcome trend”, however, it adds that overall, the industry has failed to align its business with the consensus on what is required to limit global warming.

Further, the “numerous loopholes” in policies and standards allow insurers to continue underwriting the expansion of fossil fuel production.

Thus, the letter writes: In line with the scientific consensus and appeals from the UN Secretary-General we, the undersigned organizations of the Insure Our Future campaign, call on you to take the following steps to support the global goal of limiting climate change to 1.5°C:

– Immediately cease insuring new and expanded coal, oil, and gas projects.

– Immediately stop insuring any new customers from the fossil fuel sector which are not aligned with a credible 1.5ºC pathway, and stop offering any insurance services which support the expansion of coal, oil and gas production at existing customers. Within two years, phase out all insurance services for existing fossil fuel company customers which are not aligned with such a pathway.

– Immediately divest all assets, including assets managed for third parties, from coal, oil, and gas companies that are not aligned with a credible 1.5ºC pathway.

– By July 2023, define and adopt binding targets for reducing your insured emissions which are transparent, comprehensive and aligned with a credible 1.5ºC pathway.

– Immediately establish, and adopt as policy, robust due diligence and verification mechanisms to ensure clients fully respect and observe all human rights, including a requirement that they obtain and document the Free, Prior, and Informed Consent (FPIC) of impacted Indigenous Peoples as articulated in the UN Declaration on the Rights of Indigenous Peoples.

– Immediately bring stewardship activities, membership of trade associations and public positions as a shareholder and corporate citizen in line with a credible 1.5ºC pathway in a transparent way.

Insure Our Future states that these policies should be applied by both insurance and reinsurance companies at the group level, adding that reinsurance companies should apply the policies to direct, facultative and treaty business.

In closing, the network quotes UN Secretary-General António Guterres, who has repeatedly appealed to the business community to take urgent steps to scale up climate action.

“Climate destruction is not moving incrementally. We cannot move incrementally. This is not a time for tinkering. It is a time for transformation,” stated Guterres.

“2023 is a year of reckoning. It must be a year of game-changing climate action. No more baby steps. No more excuses. No more greenwashing.”