Contact: Andrew Taylor, Coal Action Network, andrew@coalaction.org.uk
Arch Capital Group Ltd and AEGIS London join the 19 (re)insurance companies ruling out the controversial East Africa Crude Oil Pipeline (EACOP) project.
Arch Capital Group Ltd responded to ongoing pressure on their insurance business by ruling out insurance for the East Africa Crude Oil Pipeline (EACOP). A statement issued by the company follows sustained pressure on Lloyd’s of London managing agents to rule out underwriting EACOP, and days after Money Rebellion spilt fake oil outside Arch’s London offices.
Patrick Palmer, Head Of Marketing and Communications at Arch Insurance International, confirmed, in an email to Money Rebellion and Coal Action Network : “Arch Capital Group Ltd. can confirm, on behalf of its underwriting operations, that it has not and will not issue any insurance policies covering the East African Crude Oil Pipeline.”
Arch Capital Group Ltd had been targeted by people across the world, from a range of groups, for over two months exposing the numerous climate, environmental, social risks and human rights violations associated with the project. Thousands of emails had been sent to staff asking them to raise the issue with senior management, hundreds of supporters of the #StopEACOP coalition and Coal Action Network, called Arch to recommend they rule out EACOP, and regular protests have been held at Arch’s offices.
In the same week, AEGIS London also ruled out the controversial project as the project doesn’t meet their ESG policy. The total number of insurers ruling out EACOP now stands at 21. Both companies are members of the Lloyds of London insurance marketplace where it has been suggested that the companies behind EACOP (TotalEnergies and CNOOC) are seeking insurance.
The East Africa Crude Oil pipeline, or EACOP is a 1,443 kilometre pipeline planned for Uganda and Tanzania. It threatens to displace thousands of families and farmers from their land, severely degrade critical water resources and wetlands in both Uganda and Tanzania, and rip through numerous sensitive biodiversity hotspots. The oil transported via the pipeline would generate 34 million tons of carbon emissions each year. Local resistance against the project has been ongoing since 2017 as an international Stop EACOP campaign has led advocacy since 2020.
Omar Elmawi, Coordinator of #StopEACOP Coalition stated, "the number of banks (24) and (re) insurers staying away from EACOP is a clear indication that this pipeline and the associated oil fields will cause huge impacts to people, nature and climate if allowed to proceed. Supporting this project is supporting human rights violations and a carbon bomb that will be impossible to difuse once it goes ahead."
EACOP has been condemned by the European parliament for its associated human rights abuses in Uganda and Tanzania with arrests and indefinite detention of peaceful protestors taking place in October, forcing other insurers to distance themselves. The pipeline and associated Tilenga oil field are expected to displace almost 118,000 people in Uganda and Tanzania. And nearly a third of the pipeline would be built in the Lake Victoria Basin, on which more than 40 million people depend for their water and food production and where an oil spill would be disastrous.
The fake oil spill outside Arch’s offices was organised by Money Rebellion as part of a series of actions targeting ‘fossil fuel enablers’ across London, where different Extinction Rebellion groups targeted different organisations asking them to cut their ties with fossil fuels.
Rafela FitzHugh from Money Rebellion said: “We’re happy with Arch and AEGIS’ announcements, but people shouldn’t still have to push for change. With deadly weather destroying lives across the world, the insurance sector should be turning its back on all new fossil fuel projects now. Citizens resisting the East Africa Crude Oil Pipeline in Uganda and Tanzania, are facing arrest and human rights abuses. We continue to stand with them and have written to Canopius Group, and Chaucer, to tell them to expect us on their door step soon if they don’t rule out insuring EACOP.”
A number of insurance companies contacted by the Stop EACOP campaign have offered no comment on their involvement. These include AIG, Tokio Marine Kiln, Brit, Canopius Group, Chubb, Liberty Mutual and Chaucer.
Isobel Tarr of Coal Action Network said “It’s clear that insurance companies want to avoid being implicated in this disastrous project, and that hundreds of people taking small actions can compel insurance companies to take a stand. If companies want to avoid coming under this kind of pressure then they need to adopt robust exclusion policies on all fossil fuels, and this includes Lloyd’s of London.”
With 24 major banks also ruling out support, the project developers have postponed the project’s financial close and are aiming for a new deadline of early 2023. This is not the first time the financing of the project has been delayed. The EACOP has now been delayed 3 years and counting.
Stop EACOP campaign advocates that instead of locking Uganda into a fossil fuel trap, financial actors should redirect their investments towards renewable energies. Instead of an economy that relies on multinationals extracting as much profit as possible, Uganda and Tanzania need an economy that is shaped and driven by local people and celebrates the people, biodiversity, heritage and natural landscapes of the region. An economy that provides quality jobs and long-term, sustainable financial security for young people, men and women. An economy that does not require the destruction of the environment, endangering wildlife, or driving families off the farmland on which they depend.
ENDS
Photos from XR Cut the Ties oil spill protest at Arch
https://show.pics.io/xr-global-media-breaking-news/search?tagId=637b658faab7680013dab7de
Notes to Editors
Who’s insuring the East Africa Crude Oil Pipeline checklist
https://www.stopeacop.net/insurers-checklist
Who’s banking the East Africa Crude Oil Pipeline checklist
https://www.stopeacop.net/banks-checklist
EACOP human rights / climate damages report (French)
EACOP in likely breach of IFC Performance Standards on Displacement & Risk to Livelihoods
https://www.banktrack.org/download/crude_risk/cruderisk_eacop_briefing_nov2020_1.pdf
BREAKING: Extinction Rebellion takes action at the offices of fossil fuel enablers across London
Analysing 30 leading primary insurers and reinsurers, assessing their policies on insuring and investing in coal, oil, gas, the 6th Annual Scorecard cuts through the greenwash and sorts the meanest from the greenest. The report highlights progress and loopholes, calls out leaders and laggards, and identifies challenges and opportunities for the year ahead.
The number of coal exit policies has grown from 35 to 41 this past year, with major US insurers known for their role in fossil fuels AIG and Travelers finally getting on board. The market share of insurers with coal exclusions has reached 62% in the reinsurance and 39% in the primary insurance markets.
In terms of new power stations, this is good news: according to the report many of the key laggards that are continuing to underwrite new coal projects lack the capacity and expertise involved in insuring complex large-scale new coal power plants.
There is still a lot of work to do: many companies still have no policies excluding coal, and some of those that do extend only to power stations and thermal coal mines, not coking coal mines. Meanwhile Lloyds of London's coal exclusion guideleines are non-mandatory, and they take on 40% of the global energy market.
Insurance company restrictions on oil and gas are only just starting to catch up with those on coal. The new report shows 13 companies have adopted oil and gas restrictions, compared with 41 on coal.
Be it in the IPCC’s 1.5°C report, the IEA’s Net Zero Roadmap or the One Earth Climate Model, climate scientists are clear that there is no space for any new coal, oil or gas projects in credible pathways to limit global warming to 1.5°C. Yet most insurance companies have not taken this scientific evidence on board and continue to offer support to projects and companies expanding oil and gas production
Some insurers like Liberty Mutual, Chubb and Tokio Marine have adopted some restrictions on coal but actively insure the expansion of the oil and gas industry.
For the second year running, companies were ranked on their policies of Free, Prior and Informed consent: i.e. do they support projects that are in conflict with communities, and respect the right of communities to say no?
In summary, very few of them commit to anything like this.
While Allianz and Swiss Re mention of the right to Free Prior Informed Consent (FPIC) in their policies, AXIS Capital was the first insurer to adopt an explicit policy “to not provide insurance coverage on projects undertaken on indigenous territories without FPIC” in accordance with the United Nations Declaration on the Rights of Indigenous Peoples. The policy marks an important breakthrough for the recognition of Indigenous rights and other insurers should emulate it.
“So far, there hasn’t been real regulatory pressure. And there hasn’t been market pressure … as in the short term, it’s still a profitable business. So we think public pressure has really made an essential difference”
- Lindsay Keenan, Insure Our Future (the Guardian)
As part of the StopEACOP Coalition, we've been mobilizing to persuade insurers at Lloyds of London to drop the contraversial East Africa Crude Oil Pipeline.
Not only does this make the pipeline harder to finance, it also informs insurance companies about the damaging impacts of oil and gas pipelines, and is part of the movement to shift the whole industry away from fossil fuels.Sign up here to commit taking regular action with us - it's easy to do from home!
Along with our partners in the #StopEACOP coalition, Coal Action Network has been targetting insurers to turn the tide on fossil fuel insurance. This month, QBE, Suncorp, Generali, Aspen and Helvetia stated that they will not be providing insurance support to the East Africa Crude Oil Pipeline (EACOP).
They follow five other insurance companies who ruled out the project in recent months, making 18 insurance companies who have ruled it out overall. QBE and Suncorp are two of Australia's biggest insurers. Generali is Italy's biggest insurer.
In addition, Italy’s largest bank Intesa Sanpaolo, Germany’s second largest bank DZ Bank, as well as Natixis from France, have joined the growing list of banks that have ruled out direct finance for the EACOP project, bringing the total to 24. Spanish bank Santander is also understood not to be financing the project, which would be precluded as part of the bank's Environmental, Social and Climate Change Risk Management Policy.
Is the EACOP project looking less and less viable? There are now no French banks backing EACOP (Total Energies being a French company), and these refusals are coming from the company's former backers.
“With so many of Total’s financiers out of the running to join the $2.5 billion project loan the EACOP needs to proceed, the pressure is growing on those few that remain. This includes South Africa’s Standard Bank, Japan’s SMBC and MUFG, Industrial and Commercial Bank of China and Bank of China, as well as UK’s Standard Chartered, which as chair of the Net Zero Banking Alliance should not be going anywhere near new oil projects of any kind, especially not one as mired in human rights and environmental damage as this.”
-Ryan Brightwell, Campaign Lead Banks and Human Rights at BankTrack
EACOP has been condemned by the European parliament for its associated human rights abuses in Uganda and Tanzania. The pipeline and associated Tilenga oil field are expected to displace almost 118,000 people in Uganda and Tanzania, and since last week nine peaceful protestors were arrested following a student-led peaceful demonstration against EACOP in Kampala, Uganda.
“Lending or underwriting to projects that are mired in human rights violations, lacking in free prior and informed consent is wrong, shameful and unacceptable. The (re)insurers and banks that are still considering or are committed to underwriting EACOP cannot claim innocence, they are on the side of the human rights violators and this therefore makes them complicit.”
-Omar Elmawi, co-ordinator of the StopEACOP
Many of the insurance companies which have failed to rule out insurance for EACOP have syndicates at Lloyd’s of London, where the companies behind EACOP have reportedly been looking for insurance cover. These include Arch, AIG, and Chubb to name a few. These insurers must rule out EACOP immediately, to stand against the human rights abuses that are taking place in the name of this climate-wrecking pipeline. Lloyd’s Council urgently needs to commit the marketplace to policies ruling out new fossil fuel projects in alignment with the science on keeping global temperatures below 1.5C warming.
Companies who have not responded to the campaign's requests for comment are:
Aegis London, AIG, Arch, Brit, Canopius, Chaucer, Chubb, Cincinnati, Liberty Mutual, Lancashire Syndicates and Tokio Marine Kiln.
All of these have syndicates at Lloyds of London. The Lloyds council is responsible for regulating the Lloyds Marketplace (see Lloyds explainer here), and could bring in measures to stop fossil fuel projects, and those with human rights abuses, from being targetted.
We can see these tactics are working. But we need all insurance companies to rule out EACOP, and stop the toxic pipeline at its source. Next, we want Arch insurance to rule it out, and we know that constant pressure works.
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Lloyd’s of London Chairman, Bruce Carnegie-Brown, has allegedly offered an ‘olive branch to eco-activists’ – as reported in The Insurer this week. Having listened to his comments, we’re not so sure – and we certainly won’t be placated until the insurance industry’s actions start speaking louder than their words.
Industry publication The Insurer has released two clips from a recent panel discussion on climate issues with Carnegie-Brown and Canada’s former Conservative prime minister Stephen Harper, chaired by The Insurer’s managing editor, Peter Hastie.
The Insurer’s basis for claiming Carnegie-Brown offered climate activists an ‘olive branch', is based around their assertion that he states ‘eco activists were “clearly” needed’ to bring about change. The clip from the discussion, however, presents a different story. Instead, Bruce describes ‘eco-activists’ as ‘unreasonable people.’ What Carnegie-Brown actually says is ‘clearly’ needed is ‘some change in our perceptions about the impact of the way we behave in our everyday lives.’ This speaks to a desire of top polluters and their enablers, the key drivers of climate change, to push the responsibility onto individual behaviour – and away from themselves. It also implies our everyday lives are equal in their contributions to climate change. In reality, the richest 1% of the population are responsible for more than 15% of global emissions. As highlighted by the United Nations’ IPCC, we need change on a much larger scale in order to avoid the worst effects of climate change. This includes, regardless of existing construction, no new coal plants to be built or become active.
One of Carnegie-Brown’s main criticisms of the growing global movement putting pressure on insurers worldwide was the ‘tendency to be single issue based.’ Instead, he argues that climate change cannot get addressed on a case-by-case basis. We would be the first to agree with that! We need market-wide policy to effectively mitigate climate change. This is something we have been continually pressuring Lloyd’s to take – our first demand of them is an immediate phase out of the insurance of all coal and fossil fuels. Lloyd’s targets are woefully inadequate, and there has been no effort to report on whether members are fulfilling their own commitments, though we know from other sources that they are not. In this sense, the same case-by-case basis ‘strategy’ that Carnegie-Brown is so critical of is driven in part by Lloyd’s own inaction and lack of transparency.
It is frontline communities who bear the brutal impacts of these projects. Our actions stand in solidarity with those most affected by extraction. It’s misleading to caution, as Harper does during the panel, that ‘satisfying the activists in London when you decommission a power plant, but on the ground in some emerging economy it may be terrible.’ This sets up a false dichotomy – implying those ‘on the ground’ are not actively campaigning against extraction, when in fact all the insurance campaigns we work on are led by communities on the ground who are demanding better alternatives to fossil fuels. There are the disastrous risks to people on the ground from the projects that continue to be insured on the London market, such as forced displacement, water contamination, catastrophes such as failed tailings dams, extensive habitat and biodiversity loss.
The concern voiced by the panel on behalf of ‘people on the ground’ is therefore misdirected. It would be better directed by placing exclusions on the Lloyds marketplace which would see these disastrous projects turned away at the door. We highlight that we are continuing to demand the democratisation of the insurance industry to force a just transition for all.
Carnegie-Brown also speaks of the need for ‘common data’ to support sector wide action on climate change. Yet the data is already there. And it says this: there can be no new fossil fuel projects starting after 2021 if we are to stay within 1.5 degrees of warming. Instead, Carnegie-Brown suggests a reduction of carbon intensive activity that ‘reduces every year to get to net zero by 2050.’ This flies in the face of existing data – net-zero by 2050 is not enough. At a bare minimum, we need the insurance sector to be meeting the United Nations’ Race to Zero criteria. Given the availability of extensive scientific evidence, the panel’s calls for ‘data’ in order to act seem really to be calls for data that support their current position, rather than challenge them to change.
So, while The Insurer reports on this positively, characterising it as recognising the need for climate activists to bring about change, at most this amounts to greenwashing. In a telling comment, Stephen Harper advises the insurance industry in the discussion to ensure that they ‘have a story’ (read: PR) about moving in a positive direction – whilst ensuring that this story doesn’t harm their ‘bottom line.’ As ever, profits come first.
A ‘story’ is not enough. We need those who currently hold the power to act to keep fossil fuels in the ground, and support just climate solutions. Until then, it seems we will have to carry on being ‘unreasonable.’
Talanx, Germany's third largest insurer, is the latest (re)insurance company to confirm to the #StopEACOP Coalition that they will not (re)insure the East African Crude Oil Pipeline (EACOP). They join 11 other (re)insurers, including 4 of the world’s biggest (re)insurance companies - Munich Re, Swiss Re, Hannover Re, and SCOR.
Talanx follows fast in the steps of three other (re)insurers (Argo Group, Axis Capital and RSA Group), who last week also confirmed they would not be involved in underwriting EACOP.
In an email to a member of the StopEACOP campaign, Talanx's Group Strategy and Sustainability Manager, Dr. Jan-Philippe Lüdtke, stated:
"I can now confirm that there is and will be no involvement in EACOP by Talanx or any of its subsidiaries."
This statement implies that Talanx subsidiary, Lloyd’s of London member Argenta Insurance, will also stay away from the controversial EACOP project.
The total number of (re)insurers who have confirmed they would stay away from EACOP is currently 13.
Despite recent media reports claiming that the EACOP has been fully insured through a local consortium, the #StopEACOP Campaign maintains that the project needs substantial international insurance and reinsurance to proceed. See the full statement here.
“More and more (re)insurers are learning about the many problems that EACOP is bringing to the people of Uganda and Tanzania and the health, social, and climate impacts that the pipeline will leave in its wake, and they are wisely distancing themselves from the project. It is time for other (re)insurance companies to follow suit and refuse to be accomplices to such dreadful projects that are premised to only benefit the oil companies Total and China National Offshore Oil Company (CNOOC) at the expense of everyone else,”
- Samuel Okulony, Chief Executive Officer, of Ugandan-based Environment Governance Institute (EGI).
The EACOP project is a climate bomb. Its direction depends on the decisions (re)insurers make today. They have the power to save humanity, to rescue the thousands of people being displaced in Africa, to save the source of the longest river in the world, to save biodiversity that is on the verge of extinction which includes elephants, chimpanzees, giraffes, birds, insects, reptiles, forests, game reserves, rivers and waterfalls that people pay to visit in Africa. All these and more are at their mercy,”
- Hilda Flavia Nakabuye, climate activist and founder of Fridays For Future- Uganda.
“We now have 20 banks, 4 export credit agencies and 13 (re)insurance companies that have confirmed to us that they will not give project financing or underwrite EACOP. The other insurers and banks still considering any involvement in EACOP, like Industrial and Commercial Bank of China, Standard Bank-South Africa, and Sumimoto Mitsui Banking Corporation, are putting corporate needs and profits before people’s lives, nature and climate. It is time they choose sides. The whole world is watching and hoping they do what’s right – which is putting people’s lives before corporate greed.”
- Omar Elmawi, Coordinator of the #StopEACOP Coalition
Now Talanx CEO Torsten Leue must adopt a more comprehensive policy that excludes not just EACOP but all other new oil and gas projects. Talanx currently lags behind not just its major rival Allianz but also its own subsidiary Hannover Re, both of which adopted more comprehensive policies earlier this year.
“It is good to see Talanx HDI finally join the growing group of insurers who are snubbing EACOP. However, it is also imperative for the company to produce a sensible, comprehensive oil and gas policy that goes beyond oil sands alone. Instead of publicly advertising its expertise as an insurer of onshore and offshore fossil fuel extraction, Talanx HDI ought to swiftly exclude the complete unconventional sector, and in general, all new projects along the oil & gas value chain to then decisively phase out fossil fuels in line with climate science.”
- Regine Richter, Finance and Insurance Campaigner at Urgewald
Insurance providers Argo Group and Axis Capital, both Lloyd’s of London members, and RSA Insurance Group Limited, a leading UK insurer, have informed the #StopEACOP coalition that they will not be involved in underwriting the East African Crude Oil Pipeline (EACOP) project.
The decision by the three firms brings to 11 the total number of (re)insurers who have committed not to provide insurance coverage for the EACOP project. This is significant because the project needs substantial levels of international (re)insurance to proceed. The firms cite the EACOP project’s potential impact on people, nature and climate as among the reasons for their refusal to underwrite the project.
“We are able to confirm that providing insurance for the EACOP project, its construction, contractors, infrastructure or operation is not within our risk appetite. Therefore, we have not and will not provide insurance services associated with this project.”
- Alex Hindson, Chief Risk & Sustainability Officer, Argo Group
RSA Insurance Group Limited officially communicated that “our underwriters follow our Climate Change and Low Carbon Policy, which means we would not provide cover to the East Africa Crude Oil Pipeline.”
Axis Capital noted the insurance firm “…do[es] not support the East Africa Crude Oil Pipeline” and also confirmed that they “...do not envisage supporting EACOP in the future,” in email correspondence with Coal Action Network.
The EACOP and the associated Tilenga and Kingfisher oil fields are faced with widespread resistance locally in Uganda and Tanzania and globally, with over 1 million people signing a global petition against the projects. The planned pipeline is displacing tens of thousands of households in Uganda and Tanzania.
“TotalEnergies insists on forging ahead with the EACOP project even in the face of substantial local and global opposition. The company downplays the negative impacts of the project while arguing that the project is good for Uganda’s economic development. The truth is that the project is only good for Total and its shareholders and not the frontline communities facing displacement and human rights violations that have harmed their livelihoods. Financial institutions that are serious about protecting human rights and avoiding climate breakdown should rule out supporting the EACOP.”
- Diana Nabiruma of Africa Institute for Energy Governance (AFIEGO), Uganda
The EACOP, its associated upstream oil projects and related infrastructure such as roads, pose a threat to livelihoods, local cultures, sensitive ecosystems and wildlife, including endangered species in the Lake Victoria basin, Budongo forest, Murchison Falls National Park, Biharamulo Game Reserve and others.
The news comes against the backdrop of a worldwide concern that oil companies are making a killing by harming the environment and leaving communities where their projects exist languishing in poverty.
“As oil companies continue their operations in Africa, raking in huge profits, local communities are left to deal with the negative socio-economic and environmental impacts of these exploits. We welcome the move by Argo Group, Axis Capital and RSA not to offer (re)insurance coverage to the EACOP project, a project that not only comes at a huge cost to people, nature and climate but also jeopardizes key sectors that employ the majority of people in Uganda and Tanzania such as agriculture, tourism and fisheries. We call on other financial institutions that are yet to distance themselves from EACOP to do so and seal the fate of this harmful project.”
- Omar Elmawi, Coordinator of the #StopEACOP Coalition
These commitments illustrate the growing level of rejection of the project by international (re)insurers. EACOP can not proceed without international (re)insurance. RSA is a leading UK insurer, while Argo and Axis are members of Lloyd’s of London, the world's largest (re)insurance market. This adds to the pressure on the other Lloyd’s members and the wider insurance market also to reject EACOP. We also call on insurers as investors to proactively support renewable energy projects in Uganda, Tanzania and throughout Africa, where such projects are not in conflict with communities or ecosystems.
In addition to the 11 (re)insurers that have distanced themselves, 20 banks and 4 export credit agencies have committed not to provide project financing for the EACOP project.A recent report noted that the EACOP presents various violations of the IFC Performance Standards and Equator Principles in terms of both human rights and climate impacts.
Last Thursday, 18th May, Coal Action Network protested outside of Lloyd’s of London, for their role in insuring the expansion of the Trans Mountain Pipeline (TMX) and the East Africa Crude Oil Pipeline (EACOP).
We built a fake pipeline outside Lloyds of London. Through previous actions outside Lloyds of London, we know that there are many sympathetic staff who do not support their workplace insuring the expansion of the Trans Mountain Pipeline and the East Africa Crude Oil Pipeline. Therefore we are asking staff to sign an open letter to John Neal, CEO of Lloyds of London. The letter demands that he make a clear statement that no Lloyd’s syndicate shall renew or provide insurance for TMX or EACOP, and implement a policy to stop the underwriting of fossil fuel expansion and other carbon-intensive projects by all members of the Lloyd’s marketplace.
We want to shed light onto Lloyd’s of London's appalling environmental record, and the colonialist practices from which Lloyd’s of London grew. From the insurance of slave ships, to the insurance of climate-destroying projects that dispossess indigenous peoples of their land, Lloyd’s of London have blood on their hands.
The TMX pipeline carries diluted bitumen, which is a fossil fuel and the expansion of it leads to further climate catastrophe for local communities and globally. The proposed expansion would transport an additional 590,000 barrels of oil daily, tripling its current capacity.
An increase of this scale cannot be justified at a time when leading scientists have made it clear that there is no room for any additional fossil fuel infrastructure, nor considering the devastating impacts of tar sands specifically. To meet the urgency of the climate crisis, we need to unite together and take action to increase the pressure like never before. In the run-up to Lloyd’s of London’s AGM we have been asked to help indigenous Land Defenders in Canada to cut off insurance to the Trans Mountain Pipeline.
“The Trans Mountain tar sands pipeline threatens my nation and our sacred Sleilwaut (Burrard) inlet; our place of creation. The pipeline poisons our clam beds and violates the rights of many Indigenous communities along its length and at its source. Expanding tar sands extraction and increasing the capacity of the Trans Mountain pipeline network is nothing less than climate destruction,” said Kayah George of Tsleil-Waututh Nation and Tulalip Tribes. “The Lloyd's marketplace and syndicates like Arch urgently need to get the message: it’s time to move away from dirty fossil fuels and instead uplift Indigenous rights, a healthy environment, and a stable climate.”
Campaigning efforts to stop the insurance of the TMX pipeline in 2020 led to three insurance companies cutting ties with the pipeline: Zurich (the lead insurer), Munich Re, and Talanx. We are hoping to build on this momentum to drive away more insurers this year. Already this year specialty insurance and reinsurance firms Aspen Insurance and Arch Insurance have confirmed that they do not plan to renew their insurance of the Trans Mountain Tar Sands Oil Pipeline project when its current insurance policy expires this summer.
The confirmation sees 18 insurance companies that have either dropped Trans Mountain or vowed to rule out insuring the Trans Mountain Expansion Project as climate advocates call for the insurance industry to shore up climate strategies. Lloyd’s of London must follow suit.
Reposted from Insure our Future
Lloyd’s of London published its 2021 Environmental, Social and Governance (ESG) Report two days ahead of its Annual General Meeting on May 19.
Lloyd’s second ESG report is a document almost completely lacking in substance which does more to obscure the climate destroying actions of its members than to shed light on how it intends to reach its often stated net-zero by 2050 ambition. It has almost no information on concrete climate action and raises many serious questions about Lloyd’s.
Most notably, Lloyd’s second ESG report says nothing about the outcomes of the climate commitments it made in its first ESG report released at the end of 2020. Previously, Lloyd’s stated it was asking its managing agents to not provide any new cover for coal-fired plants, coal mines, oil sands and Arctic energy exploration from 1st January 2022. Yet, its current report fails to report on whether or not its members are fulfilling this commitment.
Whilst Lloyd’s ESG report doesn’t tell us, we already know from other sources that not all members of Lloyd’s market have stopped providing new insurance cover for new coal projects.
For example, a recent public report by London based insurance broker Alesco, noted that while many Lloyd’s members have adopted the policy, others continue to accept new coal business.
Why has Lloyd’s, which knows these facts, not been open or honest about them in this report? Which Lloyd’s members are ignoring Lloyd’s stated ambitions? What action is Lloyd’s taking to bring those members into line? What value do Lloyd’s stated climate ambitions and targets have when they are so plainly ignored by some of its members with no consequence?
Instead of addressing these obvious questions Lloyd’s is trying to cover up its failure to deliver on its climate commitments. In other words, Lloyd’s 2021 ESG report is greenwash.
Whilst avoiding mention of its failure to have all members exclude the very worst fossil fuel projects, this report goes much further in the wrong direction. Lloyd’s doubles-down on requiring its members to continue to insure what it terms the “harder-to-abate sectors”, by which it presumably means it plans to adopt no restrictions on new oil and gas exploration. Lloyd’s completely ignores the IPCC, the IEA and others which make clear that no new oil and gas projects are compatible with staying within 1.5C global warming, and that existing production needs to be phased down.
One example of concrete climate action Lloyd’s trumpets is appointing its first Sustainability Director. The ESG report fails to mention that Lloyd’s management gave the role to one of its Senior Public Relations Officers, who had no previous sustainability-related experience. Is that an example of bringing in a great communicator to an important new priority role? Or a classic example of treating ESG as more of a public relations exercise than a substantive issue? What is clear is that the quantity and quality of largely substance free public relations materials from Lloyd’s about sustainability has increased significantly in the last 12 months.
Lloyd’s Council Chair Bruce Carnegie-Brown and its CEO John Neal sign off the report saying:
“We hope this report equips you with a helpful and comprehensive summary of our ESG activity – and we look forward to working with you to build the braver world it imagines.”
In a climate crisis that presents an existential threat to life on earth, Lloyd’s is stuck in its PR bubble talking about sharing risks to create a braver world, when in reality its members provide the insurance cover for, and invest in, climate and human-rights destroying fossil fuel projects and companies.
Lloyd’s new ESG report exemplifies many of the worst aspects of corporate greenwashing. Saying it is committed to net-zero by 2050, but not having detailed targets and not enforcing the targets it does express is not a climate science aligned policy, it is greenwash. Lloyd’s Council, led by its Chairman Bruce Carnegie-Brown, needs to start taking genuine climate action by ensuring Lloyd’s members stop insuring and investing in new fossil fuels and phase out existing investments and insurance in-line with climate science. Nothing less will do.
Finally, there are a few words in the report that I do agree with:
Rebekah Clement Lloyd’s new Sustainability Director: “The work is nowhere near done…”
David Sansom Lloyd’s Chief Risk officer: “We have much more to do…”
Alesco Energy Update 2022. Page 21: “1 January 2022 saw the introduction of the new Lloyd’s directive as regards to coal; with the initially proposed stance being that no new coal business was to be underwritten from that date. However, in light of subsequent discussions between various parties, there has been a subtle change of emphasis with each syndicate now having a more individual responsibility towards their attitude to the new coal business. Many have chosen to remain with the existing policy of not putting any new coal accounts onto their books; but others have adopted a policy of accepting new business where the client can demonstrate a clear approach to working towards an orderly transition to renewable energy”.
Lloyd’s of London member Arch Insurance has committed to no longer insure the Trans Mountain tar sands pipeline after its current insurance policy expires this summer. Arch joins seventeen insurance companies, including fellow Lloyd’s syndicate Aspen most recently, that have dropped Trans Mountain or vowed not to insure the Trans Mountain Expansion Project.
Amid pressure from activists to break ties with the tar sands pipeline expansion, in an email to Coal Action Network, a spokesperson for Arch stated:
“We can confirm that Arch Capital Group Ltd, on behalf of its underwriting operations, will not issue any future insurance policies covering the Trans Mountain Pipeline.”
Trans Mountain experienced firsthand the impacts of climate chaos in 2021. Following historic wildfires in the summer, November brought extreme flooding and mudslides that shut down the existing line for three weeks. This resulted in over two months of lower capacity oil flow.
Flooding displaced over 14,000 meters of stockpiled pipe meant for the expansion, and the company had to use hundreds of meters of pipeline from the new construction project to repair the old line.
More than 18,000 people were displaced from their homes in the climate catastrophe.
Trans Mountain pipeline expansion faces severe flooding and river crossing risks which should make insurers run a mile.
Equipment and generators were submerged in the flooded Coquihalla River; then the storms of November 2021 hit, adding half a billion dollars to the project cost.
Despite this, TMX continues to operate recklessly in flood-risk zones according to Ian Stephe of the WaterWealth Project :
"The company is recklessly setting the stage for further problems at the Vedder River crossing in Chilliwack where the river overflowed dikes. The company filed a geotechnical report that was withheld during route approval hearings and that only finds this major river crossing feasible as planned based on assumptions that were outdated when the report was written and that remain unmet. As a community member with a long history on this project, I am concerned about the impacts from this pipeline on waterways, and insurers should be too."
Charlene Aleck of the Tsleil-Waututh Nation Sacred Trust Initiative raised the question; who will fund a project this as risky as TMX?
"As the 18th insurer to rule out Trans Mountain, Arch is confirming that fossil fuel projects without Free Prior and Informed consent are a material risk. Trans Mountain's steps to keep their insurers secret will not stop the momentum towards a safer and more just world. Trans Mountain is currently looking for more financing to continue construction, but who will fund such a risky project?"
According to the last insurance certificate with company names listed, Lloyd’s syndicates collectively were the biggest insurer for Trans Mountain. Chubb and Zurich were the biggest individual insurers listed providing coverage, but since then, both Chubb and Zurich have cut ties, making Lloyd’s a remaining top target.
By refusing to rule out Trans Mountain across its marketplace, Lloyd’s of London is failing its members and the millions of people whose lives are being destroyed by climate change. With their understanding of risk, why hasn't the industry taken action decades ago?
With Arch and Aspen cutting ties, Beazley and CNA Hardy are the prime targets for public pressure.
This could all be avoided if Lloyd’s ended insurance for fossil fuels across its marketplace.
Lloyd’s of London has increasingly been the target of protests in the UK for its connection to the pipeline in the lead up to Lloyd’s of London actual Annual General Meeting on May 19. Resistance has included 60 people from Extinction Rebellion blocking the entrances at their iconic headquarters last month and a climate memorial led by Pacific Islanders and youth strikers from climate change-affected communities.
Delayed by over a decade of powerful Indigenous-led resistance, court cases, corporate campaigning, construction mishaps, and cost overruns, TMX is on it's knees. Matt Reml, (Lakota) Mazaska Talks says:
“Thanks to the effort of frontline Indigenous communities and grassroots activists, Lloyd’s of London syndicate Arch Insurance joins a growing list of insurance companies committing to no longer providing insurance for the Trans Mountain tar sands pipeline. This is a victory for Indigenous rights, environmental and climate justice. It is time for the Trudeau administration to end the Trans Mountain pipeline."
The projected cost of the Trans Mountain expansion project has quadrupled, according to recent numbers from the Canadian Ministry of Finance. The current price tag is approximately CA$21.4 billion, and the federal government pledged that it would not provide any additional funding. This leaves the budget $8.8 billion CAD short, demonstrating overwhelming opposition and challenges to building oil and gas pipelines.
Lloyd’s of London member Aspen Insurance has pledged to cut ties with the Trans Mountain (TMX) tar sands pipeline after its current insurance policy expires in summer 2022.
In an email to Coal Action Network, a spokesperson for Aspen stated:
“As a matter of corporate policy, Aspen does not comment on the specifics of any application for insurance we receive, any insurance or reinsurance contract we underwrite, or any claim we pay, however, we can confirm that we do not plan to renew the Trans Mountain Tar Sands Oil Pipeline project.”
Aspen is the seventeenth insurers to rule out insuring the toxic pipeline. It follows Chubb and Argo Group in 2021, which cited climate, environmental, and social risks.
Front-line community leaders supported the move. Charlene Aleck of the Tsleil-Waututh Nation Sacred Trust Initiative said:
“Aspen is joining insurance industry leaders in recognizing that fossil fuel infrastructure projects that don’t have Free Prior and Informed Consent are a material risk. It’s time for the rest of the Lloyd’s syndicates and the whole insurance sector to follow suit before the climate crisis gets worse”
A growing number of insurers have recognized the massive risks of the 69-year-old pipeline. The project would increase emissions equivalent to 2.2 million cars and has been delayed for years in the face of Indigenous-led resistance.
The Intergovernmental Panel on Climate Change and the International Energy Agency reports have made it clear. Any new fossil fuel infrastructure is incompatible with global climate goals of limiting temperature increases to below 1.5 degrees C. This includes the Trans Mountain pipeline.
Lloyd’s of London has been the target of a range of protests around the Trans Mountain pipeline. 60 people from Extinction Rebellion blocked the entrances at their iconic headquarters last week. A climate memorial was led by Pacific Islanders and youth strikers from climate change-affected communities.
Since this campaign began, we've seen insurers at Lloyd’s of London come under increasing pressure to cut ties with Trans Mountain. Aspen is listening, but Lloyd’s syndicates like Arch and Beazley must follow suit. We need a step change across the whole Lloyd’s marketplace.
We are calling for leadership that mandates all insurers in their marketplace to end underwriting of new fossil fuel projects. While Lloyd’s CEO John Neal blocks meaningful climate action, we expect to see ongoing protests on Lloyd’s doorstep.
In February 2021, the Canadian-owned Trans Mountain corporation petitioned the Canada Energy Regulator to keep the names of its insurance backers secret. It stated that it had “observed increasing reluctance from insurance companies to offer insurance coverage for the Pipeline and to do so at a reasonable price.”
This shows that the tar sands exclusion policies increasingly adopted by insurers are having a tangible impact on the price and availability of insurance for the sector.
According to recent numbers from the Canadian Ministry of Finance, the projected cost of twinning the Trans Mountain pipeline has nearly tripled. The latest figures show that the current price tag is approximately CA$21.4 billion, and the federal government pledged that it would not give any more money to the pipeline. Elana Sulakshana, Senior Energy Finance Campaigner at Rainforest Action Network said:
“This announcement from Aspen makes clear that the Trans Mountain pipeline network is facing serious risks that financial institutions do not want to support: lack of consent from Indigenous communities, decaying infrastructure, mounting costs, and a massive carbon footprint."
Aspen needs to clarify that its commitment rules out all parts of the existing Trans Mountain pipeline and the expansion project in the future.
It's time for TMX's other insurers to rule out continued support for the project and the tar sands sector. This includes Energy Insurance Limited, Liberty Mutual, Lloyd’s of London and syndicates, Starr, Stewart Specialty Risk Underwriting, and W.R. Berkley.
