One of the world’s leading reinsurers, Swiss Re, has this week announced it will not provide re/insurance to businesses with more than 30% exposure to thermal coal across all lines of business, the latest company to tighten the screws on the future of the thermal coal industry.
Headquartered in Zurich, Switzerland, and founded in 1863, Swiss Re is one of the world’s leading providers of reinsurance, insurance, and other forms of insurance-based risk transfer. On Monday, the company announced the implementation of a new coal policy that will see Swiss Re halt working with businesses with more than 30% exposure to fossil fuel. This new policy builds on the company’s existing decisions in 2016 to stop investment in companies that generate 30% or more of their revenues from thermal coal mining or that use at least 30% thermal coal for power generation, as well as divesting from existing thermal coal holdings.
Swiss Re’s decision is based on its commitment to the ‘Paris Pledge for Action’ signed in 2015 and the company’s commitment to limiting global warming to 1.5°C – 2°C above pre-industrial levels.
“The implementation of the coal policy is a major step forward in ensuring that our business activities are aligned with the Paris Agreement and related national efforts,” explained Edi Schmid, Swiss Re’s Group Chief Underwriting Officer. “We are working with our clients to find the best solutions that enable them to adapt to a low-carbon economy.“
“It has been our goal to develop a comprehensive approach to coal underwriting,” added Patrick Raaflaub, Swiss Re’s Group Chief Risk Officer. “This has been a complex task and I am very pleased that we are now in a position to start rolling out our thermal coal policy.”
Swiss Re is one of numerous financial institutions around the world currently examining its exposure to thermal coal and other fossil fuels, and many which have already made decisions to limit or entirely cut themselves off from supporting the fossil fuel industry.
At the end of 2017 the World Bank, and banking giants ING and AXA, all announced plans to divest from fossil fuels including coal, oil, and gas. Earlier this year, London-based financial services giant HSBC announced that it would cease financing all new coal-fired power plants around the world with three exceptions — Bangladesh, Indonesia, and Vietnam — justified by HSBC as seeking to “appropriately balance local humanitarian needs with the need to transition to a low-carbon economy.” A month later one of the UK’s four “Big Banks,” Barclays, announced that it was modifying its policies regarding coal mining and coal-fired power plants, as well as declaring “no appetite” for finance for projects in World Heritage Sites or Ramsar Wetlands locations, and greenfield thermal coal mining. Later that same month the Royal Bank of Scotland announced a new suite of energy financing policies that are designed to reduce the bank’s exposure to fossil fuel investments and included halting project-specific financing for new coal-fired power stations, coal mines, and oil sands and Arctic oil projects.