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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.

IPCC report pulls the plug on coal

The IPCC’s new 1.5°C report documents that limiting global warming to 1.5 is necessary to reduce life-threatening heat waves, droughts, precipitation extremes and many other impacts. The report finds that pathways limiting global warming to 1.5°C will require “unprecedented,” “rapid and far-reaching transitions in energy, land, urban and infrastructure.”

The new IPCC report warns that “the use of coal shows a steep reduction in all pathways and would be reduced to close to 0% (0–2%) of electricity” by 2050. In the “no or low overshoot” pathway, electricity generation from coal needs to be reduced by 78% between 2010 and 2030.

A whopping 1,380 new coal power plants are currently under construction or in the pipeline. In a plant-by-plant analysis, Greenpeace and International CoalSwarm demonstrate that the IPCC recommendations can be achieved by cancelling all coal projects in the pre-construction phase, reducing current coal capacity by half by 2030 (including a full coal phase-out in OECD countries), and phasing out global coal power almost completely by 2050.

“I think there’s no question that the breaks could be put on [fossil fuels]”, California Insurance Commissioner Dave Jones warned in response to the IPCC report, and it’s this risk which “has caused me to ask insurance companies to consider the potential impacts of that transition on their investments.”

 

NGOs publish investors' blacklist of coal developers

Coinciding with the new IPCC report, German NGO Urgewald and a number of partners released a new list of the world’s top 120 coal plant developers as part of their Global Coal Exit List. Collectively, the 120 developers in the database account for 68% of the global coal plant pipeline. The list includes companies from 42 countries and is topped by China’s National Energy Investment Group, the China Huadian Corporation and India’s National Thermal Power Corporation (NTCP).

The Urgewald database offers a great service to investors, financiers, NGOs and observers alike. The Global Coal Exit List, which contains more than 770 companies, constitutes a practical and comprehensive blacklist of coal mining companies and utilities. The updated coal plant developers list offers information on the 120 worst offenders, which no responsible financier or investor should touch.

FT story highlights need for insurance action on coal 

Days before Hurricane Michael devastated Florida the Financial Times highlighted the growing physical and liability risks from climate change to the insurance industry. As Swiss Re found, insurers incurred a record $144 billion of losses from natural catastrophes and human-made disasters in 2017. Meanwhile the legal risks for insurance clients to pay for climate damages are mounting. According to the law firm Clyde & Co., the insurance industry’s exposure to climate litigation “could go up to tens or even hundreds of billions of dollars”.

The FT story highlights actions which insurers are taking to address the root causes of climate change. “The most obvious step is to divest”, it says, adding that “increasingly insurance companies are taking a similar stance when it comes to deciding which clients to insure. A growing number have pulled back from insuring thermal coal companies, for example. If they are not investing in these companies, they argue, they should not be insuring them.”

Op-Ed: Insurance for fossil-fuel projects but not homeowners

Public filings reveal that only two of the 10 largest U.S. insurers, AIG and Farmers, have altered their investment strategy in response to climate change. However, Consumer Watchdog’s Jamie Court and Michael Mattoch point out in an op-ed piece in the San Francisco Chronicle, “AIG’s strategy is to make homeowners insurance harder to get, not end insurance for coal and tar sands excavation”.

“What if hospitals sold crack, doctors offered cigarettes in their waiting rooms, and firefighters gave out flamethrowers?”, Court and Mattoch ask. “Insurance companies’ response to climate change should be to side with the victims, not support the perpetrators.” Consumer Watchdog has joined the Insure Our Future campaign to ramp up the pressure on U.S. fossil fuel insurers.

US insurers missing in action at New York climate conference

At the US conference Insurance & Climate Risk in New York, held on September 24, there was one key sector missing - US insurers.

According to a recent report by the Asset Owners Disclosure Project, 22 out of 25 large U.S. insurers are laggards or bystanders when it comes to taking precautions against climate risks. So far, no major U.S. insurer has responded to the call of the new Insure Our Future campaign to stop insuring and divest from coal and tar sands. Only Lemonade, a small if rapidly growing home insurer, has pledged to keep its portfolio completely free of fossil fuels.

Meet and greet Unfriend Coal campaigners

Working in the insurance industry and interested in meeting our Unfriend Coal campaigners? On November 7, Peter Bosshard and Lucie Pinson, global and European campaign coordinators respectively, will introduce the Unfriend Coal effort at the Onshore Energy Conference in London on November 7. On December 3, Peter Bosshard will introduce Unfriend Coal’s 2018 coal insurance scorecard at the Insurance & Climate Risk EMEA conference, again in London. Join us!

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Fossil free insurance news you may have missed:
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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