US insurance giant Chubb Limited just announced new policies when dealing with coal, and it’s not going to make friends of the fossil fuels industry happy.
The company announced it no longer will underwrite the construction and operation of new coal-fired plants or new risks for companies that generate more than 30 percent of their revenues from coal mining or energy production from coal. In addition, insurance coverage for existing coal-plant risks that exceed this threshold will be phased out by 2022, and for utilities beginning in 2022. The same standards will be applied to Chubb’s investment activity, with the company pledging that it will not make new debt or equity investments in companies that generate more than 30 percent of revenues from thermal coal mining or energy production from coal.
The move is the latest in a string of announcements from global insurance giants that have moved to beef up their sustainable lending activity and reduce their exposure to carbon-intensive assets in recent years. In the last few weeks alone, Zurich has announced a raft of new sustainability goals, while Japan’s Nippon Life Insurance is reportedly moving to reduce its exposure to coal investments.
Meanwhile, investors and regulators, such as the Bank of England, are stepping up pressure on insurers to better assess climate risks and reduce their exposure to carbon-intensive assets that could become stranded as economies seek to decarbonize. Without the banking and insurance companies, the coal industry is