Paris, 28 July 2023 via Reclaim Finance – French insurer AXA has announced it will no longer cover new gas fields, becoming the 10th insurer to make such a commitment (1). But AXA has not gone as far as some of its peers, allowing exceptions for companies it considers to be “in transition”. Reclaim Finance decries the exceptions, highlighting that the International Energy Agency (IEA) has stated that achieving a 1.5°C scenario means no new oil and gas projects. Reclaim Finance calls on AXA to demand an end to the expansion of oil and gas production and transport, and to make this a red line that its clients must respect in order to receive insurance cover.
The insurance group, AXA, has announced that it will no longer cover new gas fields as part of its updated Energy Policy (2). This commitment will only come into force from 2025, with exceptions for projects developed by companies in transition. This commitment complements the one made in 2021 to stop covering new oil fields from 2024 (3), but falls well short of the best practices observed among its competitors.
After repeatedly defending gas as an energy that should be supported without moderation, AXA is finally beginning to shift its position to align with the scientific facts. While it is better late than never, it is regrettable that we have to make do with a measure that is still a long way off the International Energy Agency’s projections and that will only take effect in two years’ time, when people are already suffering from the amplification of the effects of climate change.
In its 2050 net zero scenario, the IEA has projected a halt to new oil and gas fields approved after 2021 and a halt to new liquefied natural gas terminals approved after 2022 (4). For the time being, only 4 insurers have taken any measures beyond the extraction of hydrocarbons (5).
Unlike its competitors Allianz, Munich and Hannover Re, AXA is weakening its commitment by reserving the right to cover new oil and gas fields as long as they are developed by companies with a “transition plan”. This maintains the approach from its previous Energy Policy from October 2021.
AXA has shown itself to be very flexible in its interpretation of these plans, voting again this year for the so-called climate plan of TotalEnergies (6), which continues to develop new fossil fuel projects and will produce 81% more oil and gas in 2030 than would be needed to match the net zero emissions scenario.
AXA has read the IPCC and IEA reports and knows full well that any new fossil fuel project threatens not only the achievement of the Paris Agreement targets but also its own commitments to net zero. AXA can no longer support its clients’ climate-destroying expansion strategies and must make its insurance products conditional on a halt to their expansion plans.
Notes:
- Allianz, Aviva, Generali, Hannover Re, HDI – Talanx, Mapfre, Munich Re, SCOR, Swiss Re have all undertaken to stop covering new oil and gas fields.
- AXA, AXA Group Energy Policy, 2023.
- AXA, AXA Group Energy Policy Focus on the Oil and Gas industry, 2021.
- International Energy Agency, Net Zero by 2050 – A Roadmap for the Global Energy Sector, 2021.
- Allianz, Munich Re and HDI – Talanx exclude new oil and gas fields as well as new pipeline projects (oil) and new oil-fired power stations. Hannover Re excludes new oil and gas fields as well as any new midstream infrastructure dedicated to the transport/storage of these new fields. For more information on the commitments of these (re)insurers, consult the Oil & Gas Policy Tracker.
- In 2023, AXA IM voted in favor of the climate plan tabled by TotalEnergies at its annual general meeting despite its incompatibility with the objective of limiting global warming to 1.5°C and against the climate resolution tabled by shareholders asking TotalEnergies to align its targets for reducing its indirect greenhouse gas emissions, known as “scope 3”, with the Paris Agreement by 2030.
