Aspen, Axa XL bow to pressure on coal project
Aspen Insurance and Axa XL are the latest in a growing number of insurers to step away from a major coal mining project in Australia as pressure mounted for the industry to distance itself from the fossil fuels sector.
The Adani Group's proposed Carmichael mine in Queensland, which would produce 4.6 billion tonnes of carbon dioxide over its lifetime, has become a test case for the viability of new coal extraction projects.
Bermudian-based Aspen Insurance, said in a statement: “Aspen can confirm that it will not be renewing any insurance policies associated with the Adani Carmichael mine.”
It continued: “As a business, Aspen understands the importance of environmental, social and governance issues and we review our underwriting approach on an ongoing basis as part of this.”
The company said it had joined the United Nations Global Compact, a “voluntary leadership platform for the development, implementation and disclosure of responsible business practices and has taken a number of steps to reduce our carbon footprint as a business, including offsetting our emissions for 2019”.
Aspen's move was welcomed by the Australian-based Sunrise Project, a green energy campaign organisation set up to shift the global financial system from fossil fuels to clean power.
Ed Hill, from the Sunrise Project, said he was not surprised by Aspen's decision to distance itself from Adani's proposed coalmine.
He said: “The project is just brand kryptonite for companies — it's why so many are backing out of it. It's so damaging for their reputation.”
A United Nations report found that phasing out coal power worldwide by 2050 could limit global warming to 1.5C through reduced carbon emissions.
The Guardian Australia reported that Axa XL will not have any further involvement in the Carmichael project.
A company spokeswoman told The Royal Gazette: “Axa XL do not currently have a live insurance policy for the Carmichael mine's assets, neither directly nor through packages, and we do not intend to do so in the future.”
Bermuda's Axis Capital last year withdrew its quote for insurance of a railway at the Carmichael mine and, at the start of the year, shifted away from underwriting and investing in fossil fuel energy with a new policy to tackle thermal coal and oil sands-related underwriting and investments.
Albert Benchimol, the president and chief executive officer of Axis, said: “We believe insurers have an important role to play in mitigating climate risk and transitioning to a low-carbon economy.”