The world’s biggest insurance company is rethinking its role in underwriting one of the biggest, most controversial carbon bombs anywhere, with Marsh LLC senior executives due to meet in New York yesterday to develop a new company position on coal projects, including the Adani Carmichael mine in Australia.
“Marsh had been attempting to arrange insurance coverage for elements of Carmichael, after many of the world’s top-tier insurers publicly said they would not underwrite the project,” Guardian Australia reports. But “Marsh has come under pressure, in Australia and overseas, due to its work as a broker” for the project in north Queensland. Climate campaigners have been devoting a lot of effort to insurers, knowing that the massive mine can’t proceed without coverage.
At an employee town hall in Melbourne Tuesday, Marsh Pacific CEO Nick Harris defended the company’s involvement with coal projects, but told staff the pressure on the company had prompted the meeting Thursday for executives “to formulate a position on this”. He added that the company “had received ‘a lot of input’ from Australia and elsewhere, including from clients who had urged Marsh to come up with a definitive stance,” The Guardian says.
Dan Glaser, CEO of Marsh parent company Marsh and McLennan, was expected to be one of the executives attending the New York meeting, and “has previously spoken about how climate change is among the biggest risks to the insurance industry,” the UK-based paper adds.
In a release issued Wednesday, Unfriend Coal cites some of the high-powered advice Marsh is receiving on whether to associate itself with Adani.
“The most powerful action that financial firms can take is to steer capital away from the most polluting companies, and toward the environmental leaders,” stated Oliver Wyman, a consulting firm owned by Marsh and McLennan, in a recent report.
“We view [insurance companies’] retreat from coal as credit positive, as it protects them against potential climate change liability risk, and reduces the risk of their investment assets becoming stranded,” Moody’s Investors Services concluded last week. “Retreating from coal has a small negative impact on insurers’ revenue and short-term profitability, but we believe it will reduce risk to their profitability over the longer term. By excluding coal and other fossil fuels, insurers can also enhance their credentials as partners to the growing clean energy sectors.”
Unfriend Coal campaigner Peter Bossard told The Guardian the global insurance industry is rapidly shifting away from coal, and Marsh “needs to join this trend”.
“Only the most reckless companies will touch the Adani coal mine at this point,” he said, “and climate campaigners will relentlessly target Marsh’s reputation and mobilize shareholders at its upcoming AGM (in New York in May) if the broker gives the project a new lease of life.”