Global insurer SCOR is withdrawing from the Net-Zero Insurance Alliance (NZIA), CEO Thierry Léger announced during the company’s most recent Annual General Meeting.
Léger also announced SCOR’s new sustainability commitments which include a new policy on gas among others.
This states that the reinsurer will no longer cover new gas field development projects. It also noted that exceptions may be made for insurance and facultative reinsurance for insureds with a verified strategy aligned with a credible Net Zero transition plan based on the Science-Based Targets (SBTi) initiative for the oil and gas exploration and production sector.
SCOR’s new policy on Arctic oil and gas states that the reinsurer will exclude specific, stand alone direct insurance and facultative reinsurance coverage for oil and gas exploration, production and related dedicated infrastructure projects in the Arctic Monitoring and Assessment Program (AMAP) Region, with the exception of the Norwegian Arctic Region.
The reinsurer’s new climate and energy transition measures also include a new policy on oil sands. This states that SCOR will no longer provide any new (or increase its commitments on existing) stand alone direct insurance and facultative reinsurance coverage, which includes both extraction and upgraders.
Finally, its new policy on coal states that SCOR will exclude stand alone direct insurance and facultative reinsurance coverage for new dedicated thermal coal mining infrastructure such as ports, washing and handling facilities.
The reinsurer also noted that it will not write any new business in respect of standalone thermal coal mines and standalone unabated coal-fired power plants.
Organisations such as Reclaim Finance have said that they welcome these new climate commitments but believe that more can be done.
In a recent statement the NGO also called on Léger, to further exclude new liquefied natural gas (LNG) terminals in order to align with the International Energy Agency’s (IEA) 1.5°C scenario projections and meet its climate commitments.
Ariel Le Bourdonnec, Insurance Campaigner at Reclaim Finance, said: “Better late than never. SCOR is finally catching up with its competitors and adding to its exclusion of new oil fields the new gas fields.
“But it’s disappointing that it hasn’t finished the job and still allows exceptions for companies in transition. The science is clear: a company that continues to develop new oil and gas fields cannot be considered “in transition”. But SCOR is setting an example for AXA, which has still to make a commitment on gas.”
An open letter signed by 15 NGOs, including Reclaim Finance, was sent in May to Légercalling on him to stop covering new gas fields and liquefied natural gas (LNG) terminals.
These new climate commitments, Reclaim finance has stated, respond to some of the demands made by its Insure our Future campaign, which calls on major insurers and reinsurers to act in the face of climate change.
“However, one demand remains unanswered: the call to stop covering new LNG terminals. SCOR was recently identified by Reclaim Finance and the NGO Better Brazoria as one of the insurers behind the Freeport LNG climate bomb, the second largest liquefied natural gas (LNG) terminal in the US, located in the Gulf of Mexico,” the organisation added.
Reclaim Finance asked SCOR about the need to stop covering new LNG terminals, to which SCOR’s management showed no intention of taking any action, according to the NGO.
“SCOR still has no policy on new transport infrastructure which contributes to the development of new fields and locks in greenhouse gas emissions for years to come. SCOR can still provide the cover that allows projects like Freeport LNG to expand. Even if SCOR has withdrawn from the NZIA, we expect it to maintain the momentum it has built up to date and to announce as soon as possible that it will stop supporting new LNG terminals,” Ariel Le Bourdonnec added.
The International Energy Agency (IEA) has projected that to limit global warming to 1.5°C requires a halt to the development of new oil and gas fields. It has also said that the war in Ukraine does not change this.
The above are well known to SCOR, which has one of the most ambitious investment policies in the oil and gas sector among French investors but an insurance policy that lags far behind its peers, Reclaim Finance concluded.