Lloyd’s Corporation is the latest insurance firm to announce that it will be divesting from coal-heavy businesses as a response to the crisis of climate change – and the cold financial reality that coal is no longer as profitable as it once was, a trend that is unlikely to reverse.
The coal exclusion policy, which will apply to any assets held in segregated portfolios, is being implemented as part of the corporation’s responsible investment strategy, and will come into effect in April 2018.
Zurich Insurance, Allianz and AXA are among the other top insurers to announce their divestment from coal, with Swiss Re also planning a similar move, and the Unfriend Coal campaign suggests that a further 15 insurers – whose coal-related assets are worth over US$4 trillion – could follow suit. The insurance industry has pulled over $20 billion of coal-related investments in the last couple of years.
Peter Bosshard, a co-ordinator at Unfriend Coal, put it bluntly: “Coal needs to become uninsurable. If insurers cease to cover the numerous natural, technical, commercial and political risks of coal projects, new coal mines and power plants cannot be built and existing operations will have to shut down.”