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Insuring Coal No More

The Unfriend Coal campaign calls on insurance companies to stop underwriting and investing in climate-destroying coal projects. This monthly newsletter shares campaign highlights on climate, coal, and the insurance industry.

Munich Re takes small step on coal

The world’s second largest reinsurer plans to stop offering insurance for new coal-fired power plants and mines in industrialised countries. In addition, Munich Re will no longer invest in shares and bonds of coal companies that generate more than 30% of their revenues in the coal sector.

There are obvious loopholes and weak points in Munich Re’s announcement: Munich Re’s commitments only cover industrialised countries in contrast with Swiss Re, the world’s largest reinsurer, who has ended reinsurance for companies that make over 30% of revenues from coal, regardless of where they operate. Other loopholes include the lack of policy for existing coal plants and no commitment to reducing coal exposure to zero by 2040 as Allianz did in early May.

Munich Re says the company is working on criteria for a climate strategy aligned with the Paris Agreement. Here is a clear opportunity to fill the gaps in the current coal policy.
ClientEarth files complaint against UK insurers

ClientEarth has reported three UK listed insurers to the FCA for failing to disclose climate change-related risks in their 2017 annual reports.

The detailed legal complaints describe how climate change may pose a material business risk to each insurer, and how this triggers legal obligations to disclose such risks to investors.

The insurers face potential fines, calls to publish more information, or public censure if the FCA decides to take enforcement action.

San Francisco calls on insurers to exit coal and tar sands

San Francisco, the host city of the Global Climate Action Summit in September, has set another example for how municipalities can combat climate change. Following similar action in Paris, the San Francisco Board of Supervisors adopted a resolution on July 24 calling on insurers to divest and end underwriting for coal and tar sands companies.

In the resolution, the Board “urges the City and County of San Francisco to screen potential insurers for investments in and underwriting of companies or projects perpetuating the extraction and use of coal and tar, and to end any formal relationship with insurers who do not take steps towards full divestment from these harmful industries”. Other US cities and counties are expected to follow suit.

The IAIS highlights insurers' vulnerability to climate risk

The International Association of Insurance Supervisors has recently released its Issues Paper on Climate Change Risks to the Insurance Sector.

The paper discusses a broad range of risks that climate change poses to the insurance sector and supervisory responses to those risks.

The Association concludes that climate change presents a ‘significant material challenge’ for the insurance sector, and that there is an ‘urgent imperative’ to consider insurers’ resilience to these risks. As such, the Paper may accelerate regulators’ scrutiny of climate risks.

SCOR air pollution report recommends insurance action on coal

Causing more than 6 million deaths in 2016, air pollution is considered the world’s most serious environmental health risk by the World Health Organization. A new report by French reinsurer SCOR examines the risks this growing threat, including the burning of coal, poses to the insurance industry.

The new report recommends that insurers “acknowledge that some sectors or lines of business such as thermal coal pose greater environmental risks and support endeavours to disengage from these industries on both the asset management and the underwriting sides”. We suggest SCOR act on the conclusions of their own research by ending all insurance and reinsurance support for new coal, including through treaty, and aligning their divestment policy with those of industry leaders Allianz and AXA.

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Got a news story or campaign action you want us to share? Email Peter Bosshard and we’ll look at including it in our next newsletter. 

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