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INSURANCE INDUSTRY NEEDS TO COMMIT TO PHASING OUT FOSSIL FUELS

Large insurers continue to insure and invest in projects related to the extraction and burning of fossil fuels, contributing to the main cause of global warming.

Senior Energy Finance Campaigner with Rainforest Action Network (RAN), Elana Sulakshana, explained: “There’s a massive gap between words and action – and the Net Zero Insurance Alliance does not appear to be stepping into bold leadership to close that gap.

“This is why we need insurance industry regulators to step in and safeguard the public good.”

Although 32 insurers have made commitments to achieve net zero greenhouse gas emissions as members of the Net Zero Insurance Alliance (NZIA), none have committed to phasing out fossil fuel underwriting in line with plans to prevent a global temperature rise of more than 1.5C.

As our briefing highlighted, we cannot rely on insurers’ voluntary initiatives. Now is the time to include crucial sustainability measures in the Solvency II Directive.

“The latest UN climate report delivers a ‘final warning’ to humanity about the impact of climate change, but the insurance industry is still funding and underwriting fossil fuel companies. Policymakers need to step in.’’

” Better regulation of the insurance industry is needed to protect our planet and its people and to safeguard the industry itself. As losses related to climate change are expected to increase, we need stronger insurance companies – and that means safer levels of capital requirements.

“The European parliament is in the middle of heated negotiations to review the EU insurance legislation Solvency II. The EU supervisor for insurers and pension funds has been consulting stakeholders, in view of recommending changes to insurers’ capital requirements to take climate risk into account.

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