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In its annual sustainability report on Thursday, Swiss Re said
from July 2023, it would no longer provide individual insurance
to oil and gas companies responsible for the world's most
carbon-intensive 10% of production.
In 2021, it had eliminated 5% of the world's most polluting oil
and gas companies based on their carbon intensity, a measure of
emissions per barrel of oil or unit of natural gas produced.
Although that leaves 90% covered, the shift is an important
signal from "one of the world's ultimate risk managers," Peter
Bosshard, global coordinator of NGO Insure Our Future, said.
"Oil and gas operations need to be phased out in accordance with
climate science or they may become uninsurable by the end of the
decade," he said.
Increased rigour by Swiss Re and others in the sector follows a
series of reports that have highlighted the urgency for change.
Last year, the International Energy Agency report said no more
new oil and gas fields should be developed if a target of
capping planetary warming at 1.5 degrees Celsius (2.7
Fahrenheit) above the pre-industrial average by mid-century is
to be met.
In line with the IEA report, Swiss Re said it would no longer
insure projects that get the go-ahead from their parent company
from 2022, unless the company has an independently verified,
science-based plan to reach net-zero emissions.
By 2025, Swiss Re said it wanted half of its overall oil and gas
premiums to come from companies aligned with such a net-zero by
2050 plan, and by 2030 all its clients in the sector should have
done so.
Also, from 2022, the company said it will no longer insure
companies or projects with more than 10% of their production in
the Arctic, apart from Norwegian producers.
On the issue of treaty reinsurance, whereby it insures bundles
of risk in a job lot, Swiss Re said it expected to finalise a
policy for the oil and gas sector in 2023.
(The story corrects to read 'treaty' (not 'facultative'), final
paragraph.)
(Additional reporting by Tom Sims; editing by Barbara Lewis)
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