Korean underwriter Samsung has become the first Asian insurer to adopt a plan to stop insuring new coal projects.
Samsung financial companies have announced it has created a ‘coal-free declaration’ in which they have committed to stop investing in and insuring the coal industry.
The news has been welcomed by campaigners across the world which said the news is hopefully the start of a number of similar announcements by Asian underwriting groups.
Campaigners said Samsung Fire & Marine (SFMI), the property & casualty insurer of the Samsung conglomerate has traditionally been a significant insurer of coal operations in the region. Greenpeace Korea and the Korea Sustainability Investment Forum (KOSIF) recently published a report which found that Samsung Life and Samsung Fire & Marine were the biggest coal financiers in Korea, ploughing a combined $12.6 billion into 40 coal fired power stations in the past 12 years.
Since August, a network of groups including Solutions For Our Climate, Insure Our Future, the Asian Peoples’ Movement on Debt and Development and Market Forces has put pressure on Samsung not to build, finance and insure the Vung Ang 2 coal power project in Vietnam under the motto, ‘Wrong Call on Climate’.
After Samsung Construction & Trading and other Korean companies announced that they would go forward with Vung Ang 2 and pull out of the coal sector later, pressure on Samsung increased. The Natural Resources Defense Council is currently running a petition which has seen more than 30,000 signatories tell Samsung that they would boycott the company’s products until it stopped financing and insuring coal projects. The Korea Federation for Environmental Movements started its own petition in Korea in cooperation with the Insure Our Future campaign earlier this week.
However yesterday Samsung announced that Samsung Life and Samsung Fire & Marine would divest from coal, and that SFMI would stop insuring new coal projects.
“We decided to strengthen our coal phase-out policies in order to strengthen our environmental and social responsibilities. Through active engagement with stakeholders, we will pursue sustainable growth”, an unnamed Samsung official commented.
“Many details of the new policy still need to be confirmed,” said a spokesperson for Insure Our Future. “Assuming it doesn’t include loopholes, Samsung Fire & Marine is the first Asian insurer – and the twenty third insurance company globally – to end insuring at least new coal projects.”
Joojin Kim, the director of Korea’s environmental group, Solutions For Our Climate, commented: “We welcome Samsung’s decision to move away from coal and expect this not to be the end of Samsung’s climate commitments. Samsung’s contribution to the climate crisis is still large, with many of Samsung’s affiliates still involved in the financing of operating coal power plants either through bond subscription or insurance underwriting. Samsung Heavy Industries is a leader in the global oil and gas industry as well. We hope Samsung’s step forward today leads to greater climate ambition.”
“We welcome the nation’s biggest two insurance companies’ decision to end coal financing,” Jieon Lee, coordinator for climate and energy at the Korea Federation for Environmental Movements, said. “We are now calling on other Korean and Asian financial institutions to follow suit. While the policy is a major step forward, the devil is in the detail. What remains to be seen is how they implement the decision and close loopholes, namely with ongoing projects. The two insurers are involved in seven new coal projects in Korea alone. Also, as Samsung believes moving away from coal is the right direction, its non-financial affiliates should do the same. For example, Samsung C&T should withdraw from the proposed Vung Ang 2 coal project in Vietnam.”