Insurance coverage big Allianz units oil and fuel exit technique

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This story initially appeared in The Energy Mix and is republished right here as a part of Covering Climate Now, a world journalistic collaboration to strengthen protection of the local weather story.

The world’s fifth-largest insurance coverage firm, Munich-based Allianz, is withdrawing protection and funding {dollars} from a large swath of fossil gas initiatives as of subsequent yr, and can cease insuring its current fossil purchasers when their insurance policies come up for renewal.

The corporate’s Statement on Oil and Gas Business Models attracts the road on upstream oil and fuel initiatives, new “midstream” services for oil and fuel processing, transportation and storage, and new oil-fired energy crops, in addition to Arctic and Antarctic exploration, coalbed methane, extra-heavy oil, tar sands/oil sands and ultra-deep sea initiatives at depths beneath 1,500 meters.

The brand new coverage applies to the largest fossil producers, every extracting greater than 60 million barrels of oil or equal in 2020, that account for 85 % of worldwide manufacturing. It additionally singles out corporations that get at the least 10 % of their revenues from tar sands/oil sands operations.

“Nations face pressing, essential selections of their power methods amid heightened geopolitical pressure and a quickly warming local weather,” the assertion declares. “Within the face of this power disaster, quick and impactful measures are obligatory to extend power effectivity and deploy renewable power sources at scale and pace.”

It provides that “as a world main insurer and enormous investor of capital on behalf of our policyholders, we’re specialists in danger administration and our merchandise assist safe our purchasers’ futures. Enterprise and society face existential threats from local weather change in a 3 levels Celsius world. As society and enterprise group, we should handle this danger by mitigating local weather change.”

The brand new coverage applies to the largest fossil producers, every extracting greater than 60 million barrels of oil or equal in 2020, that account for 85 % of worldwide manufacturing.

That motion is required now, Allianz provides.

“To restrict international warming to 1.5 levels C with cheap likelihood of success, a whole overhaul of our economic system is required,” and “on the coronary heart of it’s the transition away from fossil fuels to renewable power,” the assertion reads. “Immediate and well-managed transition plans have to be urgently developed by all gamers: monetary establishments, corporates, governments. Society should not lock in new power infrastructure that’s later made out of date to satisfy the local weather targets.”

The assertion cites the corporate’s participation within the UN’s Glasgow Financial Alliance for Net-Zero (GFANZ) and consists of hyperlinks to Allianz analysis papers on power decarbonization in Europe, the transition to photo voltaic and wind within the utility sector, transport in a zero-carbon EU, tar sands/oil sands enterprise fashions, and the corporate’s strategy to environmental, social and governance (ESG) efficiency.

Local weather organizations working to separate the finance and insurance coverage industries from fossil gas manufacturing praised Allianz for elevating the bar with an “formidable oil and fuel exit coverage”.

“We warmly welcome Allianz’s oil and fuel coverage,” mentioned Insure Our Future European Coordinator Lindsay Keenan. “As one of many world’s largest insurance coverage corporations and a significant oil and fuel insurer, Allianz has despatched a transparent sign to the oil and fuel sector and governments that new oil and fuel developments are usually not appropriate with the 1.5 levels C local weather goal. Allianz has additionally simply raised the bar for all different insurers, which now must observe swimsuit.”

“Allianz provides a lesson of management to the chair of the Web Zero Insurance coverage Alliance (NZIA), AXA, and to its different international competitor Zurich,” agreed Reclaim Finance Director Lucie Pinson. “Its coverage goes considerably additional than the insurance policies introduced final yr by AXA and Zurich, which permit for continued insurance coverage of loads of new oil and fuel initiatives. AXA and Zurich should pay attention to the numerous gaps of their insurance policies and act in keeping with their net-zero commitments.”

Regine Richter, insurance coverage campaigner at Sassenberg, Germany-based Urgewald, mentioned the coverage nonetheless falls quick by failing to rule out insurance coverage for liquefied pure fuel (LNG) terminals, fuel crops and fracking fields,” all of that are devastating to the local weather.” However “total, the coverage exhibits that the insurance coverage business is lastly waking as much as the local weather menace posed by oil and fuel enlargement.”

Richter challenged Munich Re, the world’s largest reinsurer, to “observe its friends and decide to cease insuring new oil and fuel.”

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