First Major Insurer Quits Coal as New Report Exposes Insurers’ Hypocrisy on Climate
Today, AXA, the world’s largest insurance company, announced that they will no longer underwrite coal companies is a major step towards coal becoming uninsurable globally. The AXA announcement coincides with the release of a damning new report that shows that, despite lofty rhetoric on climate change, insurance companies are playing a major role in fueling climate change through both their underwriting and investment activities.
The announcement by AXA at their Annual General Meeting makes them the first major insurer to rule out underwriting coal companies on the basis of climate change. Other insurers have followed AXA’s climate policy innovations in the past.
The report by Profundo, found that the 15 largest European insurance and reinsurance companies invest over $130 billion in fossil fuel companies and 11 of these insurers continue to be highly involved in underwriting fossil fuel projects. Only two of the insurers use their power as major shareholders to influence the greenhouse gas emissions of the companies they own.
"Insurance companies are on the world stage talking about the need to address climate change while behind the scenes they are underwriting new fossil projects that would make the goals of the Paris climate agreement impossible to reach. Insurance companies are supposed to help manage risk and protect the community, but by being such laggards on climate action, they’re contributing to the kind of catastrophic impacts from which they are supposed to protect us."
The new Profundo report complements research by Ceres, which found that 40 leading U.S. insurers have invested at least $459 billion in the fossil fuel sector.
"The insurance industry were early leaders on climate change because they understand the risks better than any other businesses. It is outrageous that after more than twenty years, major insurance companies are still fueling climate change.”
Climate Analytics and other experts have found that no new coal projects can be built if humankind is to achieve the goals of the Paris Agreement.
"The notion that insurance companies would still be underwriting new fossil fuel projects despite everything they know about the impacts of climate change is just plain irresponsible.”
Launched today, a new #UnfriendCoal coalition asks the insurance industry to undertake the following steps within the next six months:
- The insurance industry needs to stop underwriting coal projects.
- The insurance industry needs to divest from companies that generate at least 30% of their revenues or their power from coal.
- Insurance companies will also need to divest from and stop underwriting other fossil fuel projects so their business can become compatible with the goals of the Paris climate agreement
- As they divest from coal and other fossil fuel projects, insurance companies need to scale up their investments in the clean energy sector.
"Insurance companies can only regain their climate credibility if they come clean on coal. They need to stop underwriting and divest from coal projects now.”