Three days before COP26, AXA announced a new oil and gas policy which is both an important first step and a big missed opportunity. AXA is the first major fossil fuel insurer to adopt an oil and gas policy, and the document contains new restrictions on extreme oil and gas sources such as fracking, Arctic drilling and tar sands. However, according to calculations by Reclaim Finance, the policy only covers 43.5% of currently planned oil and gas expansion and allows AXA to continue insuring 56.5% of planned oil and gas expansion.
"Despite some progress, AXA's new oil and gas policy ultimately undermines its claims to climate leadership. New commitments on non-conventional sectors are welcome, but by continuing to offer insurance for 56.5% of planned oil and gas expansion, AXA has derailed both its own commitment to achieve net-zero emissions by 2050, and its responsibility as Chair of the Net Zero Insurance Alliance to lead from the front on climate. AXA needs to immediately stop underwriting oil and gas expansion projects and to already consider all companies developing such projects as not being aligned with a 1.5°C pathway.”
"In principle it's positive that the insurance industry is now finally starting to shift away from oil and gas. But self-proclaimed climate leaders need to follow the science and rule out all support for the expansion of fossil fuel projects right away. AXA needs to immediately address the massive gaps in its policy, and Allianz and Zurich need to follow up with exit policies aligning their own oil and gas business with a credible 1.5C pathway."
The International Energy Agency has confirmed that the planet cannot afford any new oil and gas projects, whether in the conventional or non-conventional sector, if we want to limit global warming to 1.5C. UN Secretary General Antonio Guterres and UNFCCC Executive Secretary Patricia Espinoza have called on the insurance industry to restrict their support for all fossil fuel expansion ahead of COP26.
From 2024 onwards, AXA will no longer provide cover for “new upstream oil greenfield exploration projects” for companies with an “ambitious and credible transition plan”. AXA lists several criteria that it will use to assess these plans and refer to the upcoming SBTi +1.5°C framework for Oil and Gas as one of these criteria. If the date is very late, the main problem is that AXA is limiting itself to putting an end to insurance coverage for oil exploration, ignoring the essential point: the development of oil and gas projects from existing reserves that are already more than sufficient to warm the planet well beyond 1.5°C. And even on exploration, the policy is problematic: it only concerns oil exploration projects and leaves aside the question of gas despite its warming power, which is very harmful to the climate in the short term.