Ten of the world’s largest insurers and reinsurers will not provide support for the development of Adani Group’s Carmichael coal mine in Queensland, Australia, following a campaign by 73 prominent environmental organisations.
The organisations, which collectively represent 76 million members, penned a letter to 30 global re/insurance companies earlier this month urging them to rule out any providing any services for the controversial coal mine and its associated rail project.
Five companies (AXA, SCOR, FM Global, QBE and Suncorp) have now explicitly pledged not to provide re/insurance for the project, while another five (Allianz, Munich Re, Swiss Re, Zurich and Generali) have existing climate policies that exclude support for the mine.
Lloyd’s, Beazley, Hannover Re and Starr have refused to rule out support for the Carmichael mine, although Lloyd’s, Beazley and Starr noted that they are not currently involved in the project.
Adani has already been forced to self-finance the $1.5 billion Carmichael mine project after 37 global financial institutions, including all of Australia’s major banks, rejected any involvement.
Opponents of the mine claim that it will have severe climate, social and environmental impacts, as it is expected to produce 4.6 billion tonnes of CO2 emissions over its lifetime, equivalent to more than eight years of Australia’s annual greenhouse gas emissions.
They also argue that the project’s rail line threatens areas of the Great Barrier Reef and imposes on the lands of some indigenous peoples.
Data from campaign group Unfriend Coal shows that over one third of the reinsurance market has now restricted its cover for the global coal industry, while at least 19 re/insurers with more than $6 trillion in assets have divested from coal, representing 20% of the industry’s global assets.
The movement has largely been led by companies in Europe, and pressure is now mounting for re/insurers in other regions to follow suit, particularly in the U.S, where none of the leading re/insurers have yet taken action on coal.
According to Unfriend Coal’s analysis, Swiss Re currently has the most comprehensive policies on coal re/insurance and divestment, as the reinsurer has ended its investments and reinsurance services for companies that rely on coal for more than 30% of their mining income or power generation.
“The giant Carmichael coal mine is a test case which demonstrates clearly whether insurers care about managing climate risk or are more interested in profiting from climate chaos,” said Lucie Pinson, European coordinator of the Unfriend Coal campaign.
“Companies that are unwilling to rule out insuring this disastrous project are threatening the future of our climate, the unique environment of the Barrier Reef and the wellbeing of local people,” she added.
Re/insurers with no policies on coal that have yet to respond to the letter include AIG, AXIS Capital, Berkshire Hathaway, Great American Insurance, Liberty Mutual, Markel Corporation, W.R. Berkley, Canopius, Chaucer, CNA Hardy, Chubb, Hamilton Insurance Group, HDI, Mapfre, Sompo, and Tokio Marine.
“Limiting global warming to 1.5ºC is flatly incompatible with expansion of coal via carbon bombs like Adani’s Carmichael mine, and no insurer that is serious about climate can facilitate that expansion,” said Jason Opeña Disterhoft, Climate and Energy Senior Campaigner at Rainforest Action Network.
“FM Global’s not supporting the mine and railway makes it the first U.S. insurer to publicly commit to not insure any coal project,” he continued. “It’s time for AIG, Berkshire Hathaway and their US peers to follow suit.”
The letter to re/insurers was coordinated by Australian NGO Market Forces, US NGO Rainforest Action Network, and the international Unfriend Coal campaign, with Greenpeace, Japan Center for a Sustainable Environment and Society, Re:Common and urgewald.
The 73 signatories also included 350.org, the Australian Youth Climate Coalition, Divest Invest, and Friends of the Earth International.