AXA Restricts Investment In & Insurance Of New Oil & Gas Projects
How can you build it if you can’t insure it? In a risk averse world, it is getting harder and harder to insure those activities which are increasing the risk of severe climate events. AXA, a France-based multinational insurance firm with approximately a trillion dollars worth of assets, is leading the way forward. “It was the first insurance company to divest from the coal industry in 2015. It ended insurance coverage for coal plants and coal mines in 2017, and now four years later over 180 globally significant financial institutions have followed suit,” IEEFA reports.
“In 2017, it divested from oil sands-related businesses (defined as companies deriving more than 20% of their revenue from oil sands, including pipeline operators) and stopped providing insurance coverage for oil sands production and related transportation (pipelines).
“Since 2017, AXA has stopped providing insurance coverage for oil and gas drilling in the Arctic region.
“Finally, in 2019, it decided to end its client relationships with large, diversified energy companies if they were not sufficiently committed to an accelerated coal exit aligned with climate science (such as RWE).”
AXA says, however, that it won’t exit fossil fuel companies that are making a concerted effort to decarbonise. Can we therefore trust AXA? It says that it will be using science-based protocols, such as the upcoming Science Based Targets initiative (SBTi) +1.5°C framework. They have a consistent track record of backing up their words with actions — check out their restoration of the Sumatra Merang Peatland.
This year, AXA is chairing the Net-Zero Insurance Alliance. It is good to see that it is leading by example, not just slogans and soundbites.
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