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Last December it was announced that AXA was quadrupling its divestment from coal businesses and would no longer provide insurance to three major oil pipelines. Now a new briefing published by Unfriend Coal reveals not everyone has followed suit, particularly in Poland.
“State-owned PGE is adding 1,800MW to its Opole coal plant, the biggest coal power plant currently under development in Europe,” read Unfriend Coal’s report Dirty Business: Insurance companies supporting the growth of Polish coal. “Allianz leads the consortium underwriting Opole, which includes Generali, Munich Re, and Poland’s PZU.
“European insurers like these are supporting the Polish coal industry, whose activities are actively working against international attempts to prevent dangerous climate change, and whose pollution causes an estimated 5,830 premature deaths every year, including 4,690 outside Poland.”
A global coalition of NGOs and social movements, the Unfriend Coal network is pressuring insurers to get out of the coal business and instead back the transition to clean energy. The campaign is determined to hold insurance providers to account for supporting further coal projects.
Much of the trouble lies in third-party assets.
“AXA was the first major investor to announce in December 2017 that it would exclude the biggest coal producers from its portfolio as well as all the biggest coal plant developers,” noted Unfriend Coal’s briefing. “However, its policy only extends to some of the third-party assets it manages leaving parts of its global portfolio untouched by its coal policy.”
A report by DeSmog UK cited company representatives shedding light on the dilemma surrounding third-party clients and investments.
“These investment vehicles are strictly regulated by local regulation: at least 70% of these assets must be invested in Poland, mostly in the Warsaw Stock Exchange (WSE) which itself is highly exposed to the coal industry,” said an AXA spokesperson, who noted that the firm manages a pension fund for third-party clients representing approximately 6% of the market.
A spokesperson for Aviva offered a similar explanation: “In Poland, local pension companies, including Aviva, manage customers’ assets under a strict regulatory regime and are not able to influence the investment strategy for these. The investment guidelines focus on domestic equity where energy industry is the second-largest after the banking sector.”
As for Unfriend Coal, it is urging “laggard” insurers – particularly the likes of Allianz, Munich Re, and Generali – to immediately commit to not renew existing coal insurance contracts or sign new contracts for coal projects in Poland; as well as adopt a policy to end all insurance cover for new and existing coal mines, power plants, and related infrastructure projects.
“Insurance companies have warned about climate risks since the 1970s, but continue to enable further coal projects through insurance coverage and investments,” said Unfriend Coal. “This must change. Our best insurance is to keep coal in the ground.”
