Trans Mountain Tries to Hide Insurers’ Identities as Industry Pushes for Climate Disclosure

The Crown corporation building the controversial Trans Mountain pipeline expansion has asked a federal regulator to conceal the names of its insurance companies to prevent them from being targeted by climate campaigners, just days before the insurance industry’s “leading international think tank” released a new task force report on climate risk assessment.

Trans Mountain Corporation acknowledges it “incurred higher costs last year due to dwindling insurance options,” Reuters reports. “Trans Mountain has already observed increasing reluctance from insurance companies to offer insurance coverage for the pipeline and to do so at a reasonable price,” the company said in its filing with Canadian Energy Regulator.

So on Monday, Trans Mountain asked the CER “to keep the identities of its insurers private as environmental activists push them to drop coverage,” the news agency writes, in a story picked up by the Globe and Mail. “Activists have stepped up pressure on banks and insurers to drop financing and insurance for fossil fuel companies, leading to European companies like AXA and Zurich pulling back from underwriting coal and oil sands projects.”

With much of the product it’s expected to transport coming from the tar sands/oil sands, Trans Mountain is vulnerable to the financial sector’s mounting objections to extreme fossil fuel production. “The expansion has also raised fears about spills,” Reuters notes. The company stressed it has the insurance it needs to cover existing operations, including the expansion project.

The Canadian Association of Petroleum Producers supported Trans Mountain’s request in a separate submission to the CER, while Sunrise Project spokesperson Jamie Kalliongis “said granting Trans Mountain’s application would undermine activists’ efforts to stop expansion of the pipeline,” Reuters writes.

A spokesperson for the Insurance Bureau of Canada declined comment on the Reuters dispatch, explaining to The Energy Mix that she wasn’t sure how the bureau’s member companies would respond to a formal regulatory request that would preferentially restrict the flow of information on a project they were trying to evaluate. [For bonus points: If a pipeline company can restrict its insurers’ access to information on climate and stranded asset risk, does that precedent allow a driver to withhold information on their latest fender bender to keep their insurance? Totally hypothetical question.—Ed.]

But Canadian insurers may soon receive some high-powered guidance on the subject. On Thursday, the Zurich-based Geneva Association, which describes itself as the “leading international think tank of the insurance industry”, published a new climate risk assessment report that stressed the importance of the information flows that Trans Mountain is trying to restrict.

“For both [property & casualty] and life re/insurers, climate change poses different levels of physical and transition risks to both sides of the balance sheet, liabilities and assets,” the association said in a release. “Knowledge sharing across companies and with other stakeholders is critical to raising risk awareness and leveraging all available expertise.”

The task force behind the report, with representatives from 17 of the world’s biggest insurers, will now work to develop a set of “climate risk assessment methodologies and tools,” the release stated. Maryam Golnaraghi, the association’s director of climate change and emerging environmental topics, said the group will focus on “advancing climate risk assessment and scenario analysis anchored in companies’ decision-making,” consistent with the recommendations of the Task Force on Climate-Related Financial Disclosures.

“In 2020 alone, the world witnessed massive wildfires in California and Australia, historic floods in China and a record hurricane season in the Atlantic,” added Geneva Association Managing Director Jad Ariss. “The societal impacts of climate change have become ubiquitous, and individuals and institutions must fully commit now to confronting the climate crisis.”