Insurance companies have pulled out $20bn of investments in coal and a significant number of them are considering to end underwriting for new coal projects, according to a new industry scorecard from the Unfriend Coal campaign.
The Unfriend Coal campaign, an initiative led by 13 international civil society organizations, calls on insurance companies to reduce exposure to coal in a bid to support clean energy transition.
In June 2017, the Unfriend Coal campaign has urged 25 largest direct insurers, life insurers and reinsurers, to take action on coal and also asked for their policies details.
In the new scorecard, which rated the 25 insurers on their action on coal and climate change, 15 insurers have already divested approximately $20bn worth of bonds and equities in a bid to reduce their investment exposure to the coal industry, which is said to be the biggest single source of CO2 emission.
Unfriend Coal said: “But although the shift away from coal is growing, these early movers still need to do more, and most insurers have yet to do anything to prevent the risk of dangerous climate change.”
Moreover, the scorecard revealed that neither insurers from the US nor major European companies such as Generali, Hannover Re, Chubb and Mapfre have taken required action on coal and climate.
The scorecard includes US insurers including MetLife, Chubb and Berkshire Hathaway, as well as Australian, European and Japanese companies.
However, four European insurers including AXA, SCOR, Swiss Re and Zurich are making efforts to change coal underwriting, the report said.
In April this year, AXA announced that it would no longer underwrite coal projects. Recently, Zurich announced that it will divest from and cease providing insurance to companies that rely on coal for over 50% of their business.
Unfriend Coal is urging insurers to adopt a tighter 30% threshold for action on coal and apply it to all types of insurance for all thermal coal.
Peter Bosshard, Unfriend Coal coordinator, said: “If insurers cease to cover the numerous natural, technical, commercial and political risks of coal projects, new coal mines and power plants cannot be built and existing operations will have to shut down.
“Insurers also manage $31 trillion of assets, and by shifting investments from coal to clean energy they can accelerate the transition to a low-carbon economy.”
Image: Insurance companies urged to reduce exposure from coal sector. Photo: courtesy of dan/ FreeDigitalPhotos.net.