Climate hawks are hailing a growing movement among international insurance companies to refuse to provide coverage to coal mining and coal-burning companies, and to divest their financial investments from the sector.
Zurich, the world’s seventh-biggest insurer with 2016 revenues of US$67 billion, became the latest this month to announce that it “intends to stop providing insurance or risk management services for new thermal coal mines or for potential new clients that derive more than half of their revenue from mining thermal coal, and also for utility companies that generate more than half of their energy from coal.”
Companies that derive between 30% and 50% from mining thermal coal or selling electricity generated from coal, Zurich said, face “enhanced risk screening”.
The Swiss company is just one of the firms “increasingly affected by the consequences of climate change,” the Guardian writes, that are now “selling holdings in coal companies and refusing to underwrite their operations.”
According to a study released by the NGO Unfriend Coal, 15 European insurers, including Allianz, Aviva, and Axa, as well as Zurich, have divested a total of £15 billion from coal assets and businesses over the last 24 months. “Lloyd’s and Swiss Re are expected to follow in the coming months.”
Then again, those “early movers represent only 13% of all global insurance assets,” the Guardian notes. And “none of the major U.S. insurers such as Berkshire Hathaway, AIG, and Liberty Mutual have taken action, according to the study.”
Nonetheless, its authors say the movement is gaining momentum.
“Coal needs to become uninsurable,” said Unfriend Coal coordinator Peter Bosshard. “If insurers cease to cover the numerous natural, technical, commercial, and political risks of coal projects, then new coal mines and power plants cannot be built and existing operations will have to be shut down.”