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Insuring Coal No More

The Unfriend Coal and Insure Our Future campaigns call 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. 

AIG’s moment of truth in the Adani Project

The All Blacks are the world’s most successful rugby team and a symbol of New Zealand’s national pride. They are also a favourite with the bookies to win this year’s World Cup which starts on Friday. Since 2012 the team’s main sponsor has been US insurer AIG.

AIG is one of the few large insurance companies which continue to cover the construction of coal projects. According to the Australian Financial Review (AFR), the insurer is providing groundworks and directors & officers (D&O) insurance for the Adani Group’s gigantic proposed Carmichael coal mine in Australia. 

The Adani Group is currently trying to arrange cover for the construction of the multi-billion dollar project and to renew the D&O policy for its Australian subsidiary by the end of September. The AFR reports that AIG’s head office has spoken out against renewing the D&O contract. Yet even after receiving a petition from SumOfUs signed by 135,000 people, AIG has so far not excluded insuring Adani Australia or the Carmichael Project.

According to a recent opinion poll, 79% of all New Zealanders are worried about climate change. The All Blacks perform the Haka, a traditional Maori war dance, before each game and several of their players are of Pacific islander heritage. How will they feel if their sponsor props up a gigantic carbon bomb that will bring yet more destruction to the Pacific islands?

Earlier this week, climate campaigners of 350 Aotearoa launched a petition calling on the All Blacks to “drop AIG until AIG drops Adani”. As the team seeks its fourth World Cup title, the US insurer will create a major embarrassment if it gets caught red-handed in the Adani Project. Will AIG see the signs of the time and publicly rule out support for the mine and its developer?  

Coal miners feel the insurance pinch

Willis Towers Watson’s most recent Mining Risk Review notes an “increasing and worrying trend for insurers to withdraw from what they consider to be environmentally unfriendly industries such as coal”. It confirms similar findings by the broker for the power sector earlier this year.

"With politicians seen at best as being too slow to tackle the [climate] challenges”, the mining head of Munich Re states in the new report, “’vox populi’ is calling upon the financial industries to use their potency to leverage the decarbonization process. Bluntly said: no investment in coal - no insurance in coal. And the fact that insurers and reinsurers are covering both sides, the risk taking and investment side, makes us an obvious 'target'."

Warning voices from the mining industry confirm that the Unfriend Coal campaign is starting to bite. Peabody Energy, the world’s largest private coal company, cautioned in its 2019 annual report that “our financial assurance obligations may increase” and “surety bonds and letters of credit may not be available to us, particularly in light of some insurance companies' announced unwillingness to support fossil fuel companies”.

Meanwhile, the CEO of South African coal miner Exxaro Resources warned in a recent earnings call that “we are also experiencing higher insurance premiums in the renewal of our insurance policies and will be incurring increased costs resulting from the recently introduced carbon tax.”

Tokyo Olympics under fire over Tokio Marine sponsorship

Increasingly institutions and sports events are coming under pressure not to accept sponsorship from coal insurers and financiers. As we reported in this newsletter Extinction Rebellion rejected a design award sponsored by specialty insurer Beazley in May, and the All Blacks are getting under pressure for their relationship with AIG.

In a letter sent yesterday, 25 NGOs from 14 countries wrote to the President of the International Olympic Committee calling out the gold sponsorship of the Tokyo 2020 Olympics by coal banks and insurers Mizuho, SMBC and Tokio Marine. “Behind the high-tech veneer of the Tokyo 2020 Olympics, the Japanese government and Olympic sponsors like Mizuho, SMBC and Tokio Marine continue to promote dirty and outdated coal technology that is fueling the climate crisis”, the coordinator of the No Coal Japan campaign commented. 

The NGOs asked that going forward the IOC “should work with Olympics organizers and host national Olympic committees to only approve corporate sponsors which have taken aggressive action to combat the climate crisis”.

Unfriend Coal website on coal exit policies

With Axis Capital, at least 17 insurance companies have by now adopted policies to end or limit insurance for coal projects and companies. A new web graphic by the Unfriend Coal campaign offers a useful overview of the different policies. The graphic summarizes the quality of the policies against four criteria and links to the original documents. A detailed analysis and ranking of the coal and climate policies of 30 leading insurers will be published by the campaign’s 2019 scorecard report on December 2 (see below).

Axis Capital plans to reduce coal exposure

new report published by ShareAction on September 13 presents practical examples for how 14 global insurers navigate escalating climate risks and regulatory pressures for better disclosure across underwriting and investment portfolios. The measures described include group-wide fossil fuel policies, Paris-aligned investment strategies and the elevation of climate in company engagement. The examples are welcome but only the first steps for an industry which needs to become a vanguard of climate action.

Loophole of the month: Double standard between investments and insurance

AXA and Allianz have adopted strong divestment policies, excluding companies highly involved in the coal sector or developing new coal plants. But contrary to Zurich, Suncorp or Swiss Re, they fail to apply the same criteria on the other side of their business, insurance services.

AXA and Allianz are still prepared to provide some insurance services, including property & casualty coverage, to companies which are planning massive coal mining projects such as RWE and the Adani Group despite having divested from them. This is inconsistent.

Take action

Sign the 350 Aotearoa petition and tell the All Blacks to drop AIG until AIG drops Adani!
Global Climate Strike: join young climate strikers on September 20 and demand an end to the age of fossil fuels.
New to the monthly Insuring Coal No More newsletter? Subscribe for free here!
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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