Climate groups have criticised Lloyd’s and Zurich Insurance Group after both revealed their future steps towards sustainability.
Zurich announced comprehensive steps towards a net zero operation with the use of renewable fuel and an electric vehicles fleet. It also pledged to use its investment power to drive sustainability in the firms in which it holds shares and those for which it provides cover.
However Swiss climate campaign group Campax described the announcement as a “whitewash”.
“The huge gap between Zurich’s stated goal of net-zero production by 2050 and the core products and services it provides cannot be whitewashed by investor engagement and reducing paper use in offices,” added Angelina Dobler, Climate Campaigner at Campax. “To make a difference and be credible, Zurich must stop insuring or investing in new and expanded coal, oil and gas projects. It must stop insuring coal companies unless they have a coal phase-out plan that commits them to closing all coal-related facilities by 2030 in EU/OECD countries and by 2040 globally.
“For compliance with a 1.5ºC pathway, it is imperative that Zurich exits oil and gas insurance. In addition, all assets that are not aligned with a 1.5°C pathway must be divested, including those managed for third parties. In short, Zurich needs a credible and consistent oil and gas exit strategy if it is to meet its own targets.”
Zurich was among the first insurers to curtail coal insurance in 2017, declining to renew its coverage for the controversial Trans Mountain tar sands pipeline last June. Zurich was also the first insurer to sign a voluntary commitment to limit the average global temperature rise to 1.5°C by 2030.
“As professional risk managers and as part of its commitment to a 1.5°C pathway, Zurich Group must therefore play an active role in ending the expansion of oil and gas production and phasing out existing oil and gas operations over time.,” Campax added.
Zurich’s announcement came on the day Lloyd’s announced its annual results for 2020.
As part of the media briefing, CEO John Neal reiterated the market’s determination to play its part in sustainability, adding climate change was a huge opportunity.
“Climate is the biggest single investment opportunity we will see in our lifetime,” he said. “It is not a threat.
“We have the opportunity to show what the investment opportunities the market can offer.”
He added that the market should be engaging with the UK government to look at how the industry can use its investment funds to work with the government to deliver on a range of predicts that will support eh move to a net zero economy.
However, climate group Insure our Future said it believed that the market’s continued coverage of coal and offal fuel projects not only tarnish eth market’s sustainability credentials bity was also costing them money.
“Lloyd’s needs to stop underwriting and investing in fossil fuel companies and projects that are driving climate change, and it needs to get coal out of its treaty reinsurance business,” said Lindsay Keenan, European Coordinator of the Insure Our Future network. “Lloyd’s would do well to follow the lead set recently by Swiss Re who earlier this month committed to completely eliminate coal from all direct, facultative and treaty reinsurance contracts by 2030 in OECD countries and 2040 globally.
“Lloyd’s, its members and its investors all need to act smarter to help keep global warming below 1.5°C, because there is no profit to be made on a 3°C+ warmer planet.”