Insurers are rushing to prove their green credentials ahead of the COP26 claimet change conference coming up in Glasgow. Aviva is the latest insurer to pledge more green project investment, plus end its association with coal.
Other insurance brands that have signed the Net Zero pledge include Allianz, Brit Insurance, Tokio Marine, Marsh and others.
Amanda Blanc, Group Chief Executive Officer Aviva PLC, Aviva, said: “We need to unlock trillions of private finance to speed up the transition to net zero. It starts with policies that genuinely drive technology, innovation and finance in the right direction, including carbon pricing schemes and credible net zero plans. Private finance will only flow at scale when the cost of polluting is built into market prices. Insurers and investors can also play an important role bringing about urgent change. By the end of 2022, Aviva will have stopped both investing in, and underwriting, insurance for coal companies unless they commit to Science Based Targets as part of our plan to take the whole company net zero by 2040.”
That firm stance by insurers on coal is virtuous, but it doesn’t resolve the central issue of consumption. If you read the PR from the COP26 activists you can see that not insuring coal mining or coal fired power stations is judged to be `lagging’ behind on the climate agenda. It just isn’t good enough.
What they want is for insurers to withdraw entirely from covering anything carbon related; oil, gas and coal.
Essentially supporting Net Zero means that insuring anything carbon related is ultimately going to be outsourced from European and North American insurers, because you cannot square this circle for green activists or politicians. In the short term it is possible that Australian insurers might take up some of the slack, since the coal industry remais a huge source of revenue to Australian politicians right now. But that industry is viewed as being problematic, even within Australia.
So in the medium term, by say 2030, it’s likely that almost all that carbon heavy, industrial sector, insurance premium revenue will head East to Beijing, where a new coal or gas fired power station is being built every week, so that millions of consumer items are produced every day, and then shipped or air-freighted around the world to global markets. Will insurers then pledge not to cover container ships, cargo planes, fast fashion, or iPhone production? Where does it end?