Energize Weekly, July 11, 2018
Swiss Re, the world’s largest reinsurer, said that it will no longer provide services to companies with a more than 30 percent exposure to thermal coal.
The thermal coal policy applies to existing and new thermal coal mines and power plants, and will be implemented across all lines of business, the insurer said. These companies will not have access to either insurance or reinsurance services from Zurich-based Swiss Re.
“It has been our goal to develop a comprehensive approach to coal underwriting,” Patrick Raaflaub, Swiss Re’s group chief risk officer, said in a statement. “This has been a complex task and I am very pleased that we are now in a position to start rolling out our thermal coal policy.”
Swiss Re has made a commitment to the “Paris Pledge for Action,” the initiative created for businesses, citizens groups, unions and others to support the Paris climate accord to reduce greenhouse gas emissions.
“Swiss Re affirmed its strong commitment to the effort to limit global warming to 1.5°C – 2°C above pre-industrial levels,” the company said in a statement. “As a result, Swiss Re supports a progressive and structured shift away from fossil fuels.”
In 2016, Swiss Re stopped investing in companies generating 30 percent or more of their revenues from thermal coal mining or that used 30 percent thermal coal for power generation. The Swiss insurer also divested from those companies.
The new policy extends the 30 percent threshold to the investment side of the equation.
“The implementation of the coal policy is a major step forward in ensuring that our business activities are aligned with the Paris Agreement and related national efforts,” said Edi Schmid, Swiss Re’s Group chief underwriting officer. “We are working with our clients to find the best solutions that enable them to adapt to a low-carbon economy.”
As well as meeting the climate goals, the policy could reduce the risk the insurer faces as market forces and government policies reduce the value of coal-fired power plants, making them stranded assets.
Other insurers have also moved away from coal-related business. In May, Munich, Germany-based Allianz stopping insuring individual coal-fired power plants and coal mines. Japanese Dai-ichi Life Insurance recently stopped financing coal-fired power plants overseas.
