Insurer Talanx has dropped support for Canada’s controversial Trans Mountain pipeline while Munich Re’s support is in doubt after it unveiled a new tar sands policy earlier this year, reveal emails to Canadian NGO Stand.earth.
Subsidiaries of both companies were named on Trans Mountain’s current Certificate of Insurance, which lists 11 companies providing $508 million of liability insurance for the 12 months to August 31, 2020. Talanx said that it pulled out of the project in 2019 and the current insurance certificate wrongly named its subsidiary HDI Global SE as providing $85 million of cover jointly with other insurers. Talanx adopted a policy limiting tar sands underwriting in 2020.
Munich Re said it would review its support for Trans Mountain in the light of its new policy on tar sands, adopted in 2020, which rules out insuring tar sands extraction projects and dedicated tar sands infrastructure, such as pipelines. Its Canadian subsidiary Temple Insurance was Trans Mountain’s third biggest insurers, providing $250 million of cover, alongside other insurers.
Sven Biggs, Canadian Oil and Gas Programs Director at Stand.earth, said: “Talanx and Munich Re are joining some of the world’s largest financial institutions in steering clear of the oil sands sector. Trans Mountain is one of most controversial energy projects in Canada’s history, which is why a mounting list of insurers refuse to back the project.”
"Those insurers extending their policies beyond coal do understand they need to be in for a penny, in for a pound on climate action. Now Munich Re must show that they are serious about their policy and quit underwriting the Trans Mountain pipeline when the contract is up for renewal.”
The existing Trans Mountain pipeline is a major environmental and public health hazard with a long history of disastrous spills. Earlier this month, 50,000 gallons of crude oil spilled from a pump station located above an aquifer that supplies the Sumas First Nation with drinking water. The Trans Mountain Expansion Project would multiply these risks tremendously.
"Trans Mountain put in the existing line without the consent of impacted First Nations and we have said no countless times to the proposed expansion. As Indigenous peoples we are stewards of our lands and waters. We have jurisdiction over activities that happen in our territories, and we don’t want them ruined by oil spills. We will continue to advocate against the insurers that continue to back the Trans Mountain pipeline and its expansion and call on all insurance companies to adopt policies stopping fossil fuel expansion.”
A global coalition of climate organizations, First Nations, and grassroots activists recently launched a campaign calling on the insurers of Trans Mountain to rule out backing the project when current policies expire on August 31, 2020. These statements from HDI and Munich Re will put pressure on Zurich, Liberty Mutual, Lloyd’s, and the six other insurers that have not yet commented on the project. European insurers Lloyd’s, Zurich, and Chubb’s European Group, are Trans Mountain’s biggest backers.
"Lloyd's actions do not match its rhetoric on climate change, and its underwriting policies do not match the climate science. Lloyd’s CEO John Neal needs to start to take some responsibility. It’s Lloyd’s name on the certificate and he is the CEO. John, it’s time to get your head out of the sand”.
The Trans Mountain expansion is a litmus test for insurers’ commitments to the Paris Agreement which aims to limit global warming as close to 1.5ºC as possible. Dr Kirsten Zickfeld, lead author of the IPCC’s report Global Warming of 1.5ºC, has said Trans Mountain and other expansion of the oil industry and its infrastructure is not compatible with this target.
The global Insure Our Future campaign (formerly known as Unfriend Coal) has expanded the focus of its campaign to include all fossil fuels. It released a new set of demands last week, calling on insurers to stop supporting all new oil and gas projects and phase out fossil fuel business in line with 1.5ºC.
To date, eight global insurers have adopted policies that limit or end insurance coverage for tar sands, citing concerns about the high-carbon intensity of the sector: AXA, AXIS Capital, Generali, The Hartford, Munich Re, Swiss Re, Talanx, and Zurich. These insurers join a growing movement of investors and banks that are shifting capital out of tar sands.