A coalition of green groups is calling on insurers to stop underwriting coal projects, on account of the risk they pose to the climate.
The #UnfriendCoal campaign builds on the work of the divestment movement to make polluting fossil fuel ventures harder to finance.
It launched on Wednesday as French insurance major Axa announced it was ending insurance support to coal-intensive businesses. Companies getting more than half of their turnover from mining or burning coal are now eligible for Axa insurance cover only in “exceptional” circumstances.
That aligns its insurance business with its asset management arm, which is ditching €177 million ($192m) of coal holdings, in line with a 2015 pledge.
Explaining its policy, the company said most fossil fuel reserves needed to stay underground to meet the goals of the Paris climate deal. Some assets could be “stranded” as the low carbon shift kicks in.
Its statement added: “Coal is often a low-cost form of energy, and is widely available to a large proportion of the world’s population. However, coal is also the most carbon-intensive energy source. Axa, like many investors, believes coal both poses the biggest threat to the climate and its business is the most likely to be constrained.”
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A report by consultancy Profundo found that Europe’s 15 biggest insurance and reinsurance companies still have $130 billion invested in fossil fuels, however. Of these, 11 are heavily involved in underwriting dirty energy ventures.
Friends of the Earth France, Greenpeace Switzerland, Market Forces, Re:Common, the Sierra Club, the Sunrise Project and Urgewald are behind a push for the sector to align with the climate goals adopted in the Paris Agreement.
“Insurance companies are supposed to help manage risk and protect the community, but by being such laggards on climate action, they’re contributing to the kind of catastrophic impacts from which they are supposed to protect us,” said John Hepburn, executive director of the Sunrise Project.
The campaigners say insurers should avoid investment in companies that get at least 30% of revenue or power from coal and scale up finance to develop clean energy.
Elena Gerebizza of the Italian campaign group Re:Common said: “The notion that insurance companies would still be underwriting new fossil fuel projects despite everything they know about the impacts of climate change is just plain irresponsible.”