Clean Disruption News: Swiss insurance giant Zurich ends coal investments as insurers pull $20bn from sector
Zurich has become the latest insurance giant to cut ties with coal-intensive businesses, bringing the amount insurers have pulled from these companies to around $20bn (£15.2bn) in just two years.
A growing number of insurers are trying to distance themselves from fossil fuels amid climate change concerns, with coal mining the biggest single source of carbon dioxide emissions from human activity.
Zurich has decided to pull money and stop offering insurance to companies that depend on coal for more than half of their turnover, announcing a change to its policies months after Greenpeace wrote to the world’s largest insurers urging them to take action.
French insurance giant Axa was the world’s first financial institution to divest from coal, removing hundreds of millions worth of coal investments in 2015, with Allianz following suit some months later. Swiss Re and Lloyd’s are set to unveil new policies in the coming months.
Fifteen insurers with over $4 trillion in assets covered by coal divestment decisions have now changed or are planning to change their policies around coal, with $20bn worth of investments so far pulled, according to a report published today by the Unfriend Coal campaign.
“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, new coal mines and power plants cannot be built and existing operations will have to shut down.”
He added that because insurers manage around $31 trillion of assets they have the power to shift money away from coal and towards clean energy, accelerating the change towards a low-carbon economy by blocking the funding for new coal mines.
Backed by a number of organisations including Greenpeace, Rainforest Action and ClientEarth, the report also ranked the world’s biggest insurers by their climate change policies – an issue that has come to the fore this year following a series of catastrophic climate disasters which has cost the sector millions.
“So far, no American insurer has taken meaningful action on coal and climate change, and even industry giants such as Berkshire Hathaway, AIG and Liberty Mutual have remained completely silent about the catastrophic climate risks affecting their clients,” the report said.
Coal as an energy source is not only in decline in developed countries – the International Energy Agency (IEA) said on Tuesday that major energy demand centres, such as China and India, are also reducing their reliance on coal-fired power in favour of renewable energy.
Coal use may have peaked in China four years ago and could decline 15pc by 2040, the IEA said in its annual world energy outlook, while in India the share of coal in the electricity mix is likely to drop from three-quarters last year to less than half in 2040.
SOURCE: The Telegraph