Zurich takes minor step away from oil and gas
November 18, 2021
Zurich’s new greenfield oil policy allows the insurer to continue business as usual on oil and gas expansion, and its Arctic and tar sands policy only excludes an estimated 10.4% of short term oil and gas expansion plans, finds Insure Our Future (1). Today, Zurich announced that it will no longer insure new greenfield oil exploration projects unless “meaningful transition plans are considered to be in place”. Zurich has also committed to no longer underwrite oil & gas drilling and production in some parts of the Arctic (2).
The Insure Our Future campaign acknowledges Zurich’s announcement as a first baby step in the shift away from oil and gas, but calls on the insurer to take more meaningful action. The campaign’s recent Scorecard on Insurance, Fossil Fuels and Climate Change found that Zurich was losing its climate leadership to more ambitious insurers. Following today’s updated fossil fuel policy, Zurich’s fossil fuel underwriting score would improve marginally from 3.2 to 3.5 and the insurer would remain in 5th place.
Zurich has committed to align all its business activities with a pathway to limiting global warming to 1.5C through its pledge to the Net-Zero Insurance Alliance. The International Energy Agency and other climate scientists agree that such a pathway cannot include any new oil and gas projects.
Peter Bosshard, Coordinator of the Insure Our Future campaign, says: “The announcements from Zurich, and previously AXA, show that insurance companies know they need to move away from oil and gas. However, the momentum needs to accelerate past the current baby steps. In order to fully align its oil and gas underwriting with climate science, Zurich needs to immediately stop insuring all new oil and gas projects, not just new oil exploration projects in companies that lack ‘meaningful transition plans’.”
SunCorp and KBC, two medium-sized insurance companies from Australia and Belgium, committed to no longer insure any new oil and gas production projects in 2020 and 2021, respectively. Zurich, AXA, Allianz, Munich Re and other major oil and gas insurers should follow their lead without delay. Going forward, insurers should use the Global Oil and Gas Exit List, developed by urgewald, to define the scope of their oil and gas policies.
Angelina Dobler, Climate Campaigner at Campax, says: “Zurich’s policy on oil and coal has been long overdue and shows that the public pressure on fossil fuel insurers is working. While the small steps of no longer insuring new greenfield oil exploration projects and oil and gas drilling in the Arctic are certainly welcome, they are far from enough. As a self-proclaimed leader in climate change, Zurich has an obligation to stop insuring all new oil and gas projects, now.”
(1) This calculation was done by Reclaim Finance, based on current production and future resource data that can be found in the Global Oil and Gas Exit List (GOGEL) and in a recent Reclaim Finance report on oil and gas extraction in the Arctic. It estimates the volume of oil and gas production resources currently under development or field evaluation that cannot be insured by Zurich, based on its current oil and gas policy (exclusion of companies deriving more than 30% of their revenue from tar sands ; and no more underwriting of oil and gas drilling and production in the Arctic defined as the Arctic Circle minus the Norwegian Shelf). On tar sands, it is an estimation by proxy: the Reclaim Finance calculation is based on companies deriving more than 30% of their oil and gas production as the revenue metric is not available.
(2) The Arctic is “considered as anything north of 66 degrees latitude with the exception of the Norwegian Continental Shelf (NCS).” Zurich Investor Day Presentation November 18, 2021.