A damning report by responsible investment charity, ShareAction, has revealed that some of the world’s largest insurers are failing to protect “both people and planet” by continuing to back projects which could be exacerbating climate change. The insurance industry is contributing to global issues through its underwriting and investment activity, leading to a “triple whammy” of global warming, damage to the natural environment and neglect of human rights.
The investigation scrutinised 65 of the world’s largest insurance companies, including life and health, property and casualty, and Lloyd’s of London. It was discovered that only two of the insurers investigated have committed to rule out underwriting four of the world’s most controversial fossil fuel projects.
These include an Australian coal mining operation, a major carbon dioxide polluter, and the Rosebank oil field in the North Sea. Shockingly, over 80% of the insurers failed to place restrictions on underwriting for companies based on human rights, worker health, conventional weapons or indigenous rights.
Furthermore, 30% of the insurers assessed scored zero for policies that would protect the natural environment and biodiversity. The UK’s flagship Lloyd’s of London marketplace was highlighted as one of the worst performers in terms of environmental and social policies.
The company, along with its top managing agents who oversee business units known as syndicates, has come under scrutiny in ShareAction’s latest report.
Lloyd’s of London, accounting for 9 percent of the global fossil fuel underwriting market, was awarded the lowest score for its policies by ShareAction, casting a “extremely poor picture of one of the most significant entities in the world of insurance”.
On the flip side, Axa Group emerged as one of the top two firms in the charity’s survey, securing more than half of the total points available, marking it as a leading performer.
Aviva, hailing from the UK, also received commendation for its performance relative to other insurers in the property and casualty sector, despite scoring just 45 percent in the survey.
The ranking of these businesses was based on various indicators reflecting their stance on climate change, biodiversity, and social issues.
Claudia Gray, who leads financial sector research at ShareAction, commented: “This report reveals the insurance sector’s abject failure to live up to its responsibilities to protect both people and planet.”
She added, “They have a both a moral duty and business opportunity to adopt responsible investments and underwriting activities.”
Insurers are in the spotlight for how they invest the premiums collected from policyholders, which can inadvertently funnel funds into companies and projects with adverse social or environmental consequences.
“What these rankings show is just how long a journey the insurance industry has to go on to meet net-zero targets, protect nature and meet their obligations to safeguard human rights.”
“It is vital that they begin that journey immediately to ensure a sustainable future for both people and planet as well as for the sake of their own long-term viability.”
ShareAction added that it would start holding meetings with some of the insurers probed as part of its investigation to go through these findings and discuss ways of improving standards.
