Lloyd’s of London’s Aspen Insurance syndicate has decided to sever ties with the existing Trans Mountain pipeline when its current insurance policy expires this summer, according to climate campaign group Coal Action Network.
Aspen joins 16 other insurers that have dropped Trans Mountain or pledged not to expand, the network said in a statement.
“Under company policy, Aspen does not comment on the details of any insurance application we receive, any insurance or reinsurance contract we enter into or any claim we pay, however, we can confirm that we do not plan to renew the Trans Mountain Tar Sands Pipeline Project,” an Aspen spokesperson said in an email to Coal Action Network. (Aspen confirmed the statement with Insurance Journal).
The other 16 insurers that have excluded from insuring Trans Mountain are: Allianz, Argo, AXA, AXIS Capital, Chubb, Cincinnati Global Underwriting, Generali, Lancashire, MAPFRE, Munich Re, QBE, RSA, SCOR, Suncorp, Talanx and Zurich Insurance Group.
Insurers are under pressure from environmental activist groups to end their coverage of fossil fuel infrastructure in order to fight climate change. Without insurance, they think, these projects could eventually be halted.
“It is time for the rest of Lloyd’s unions and the entire insurance industry to follow suit before the climate crisis escalates,” said Charlene Aleck of the Tsleil-Waututh Nation Sacred Trust Initiative, a group of Canadian First Nations activists who focused on stopping the proposed Trans Mountain (TMX) expansion project. The group fears that the project will worsen climate change and threaten the environment.
The pipeline expansion is described by the Trans Mountain website as a twinning of the existing 1,150 kilometer (750 mile) pipeline between Strathcona County, near Edmonton, Alberta, and Burnaby, British Columbia. “It will create a pipeline system whose design capacity will increase from approximately 300,000 barrels per day to 890,000 barrels per day.” (Strathcona is Canada’s hub for petrochemical activities).
Despite protests from activists, the Canadian government is continuing with the project.
“Over the past two years, Lloyd’s of London insurers have come under increasing pressure to sever ties with Trans Mountain,” commented Andrew Taylor, organizer of the Coal Action Network. (The network is pushing to end the use of coal in power generation and steel production as well as coal mining and importing into the UK).
“It’s great that Aspen is listening, but Lloyd’s unions like Arch and Beazley need to follow suit, and more broadly, we need radical change across the Lloyd’s market.” Taylor added.
“We call for leadership that compels all insurers in their market to end underwriting new fossil fuel projects. As Lloyd’s CEO John Neal blocks meaningful climate action, we expect to see ongoing protests at Lloyd’s doorstep,” he warned.
Events at Lloyd’s
Lloyd’s had to close its London headquarters last week when around 60 climate change protesters from climate activist group Extinction Rebellion blocked the building’s main entrance.
Lloyd’s has put in place a phased approach to exit investments and insurance from the fossil fuel industry, a plan it disclosed in December 2020 in its Environmental, Social and Governance (ESG) report – but the Climate activist groups demand immediate action. The Coal Action Network described Lloyd’s fossil fuel policy as “weak”.
Lloyd’s ESG policy required Lloyd’s insurers to cease providing new insurance cover by January 2022, for thermal coal-fired power stations, thermal coal mines, oil sands or new energy exploration projects of the Arctic in the oil sands. Additionally, Lloyd’s has said it will phase out renewal of existing insurance cover for these types of businesses by January 2030.
However, climate activists say the policy is unclear on how the requirements will be enforced, and they warn that the 2030 target date for phasing out renewal of existing coverage is too far off when climate action immediate is required.
Another climate campaign group, Stand.earth, said its next campaign targets would be other Lloyd’s of London insurers, Liberty Mutual, Starr Cos. and WR Berkley.
“Reports from the Intergovernmental Panel on Climate Change and the International Energy Agency have made it clear that the Trans Mountain Expansion Project and any expanded oil and gas infrastructure are incompatible with achieving the global climate goals,” said Sven Biggs, Canadian oil and gas director for Stand. Earth.
“This announcement from Aspen makes it clear that the Trans Mountain pipeline system faces serious risks that financial institutions are unwilling to bear: lack of consent from Indigenous communities, decaying infrastructure, rising costs and a massive carbon footprint.” , said Elana Sulakshana, energy fundraising manager at the Rainforest Action Network. (The original pipeline was built in 1953).
“However, we urge Aspen to clarify that its commitment extends to not insuring all portions of the existing Trans Mountain pipeline and expansion project in the future,” she said. “We are also calling on Arch, Beazley and other Lloyd’s unions to follow suit and drop Trans Mountain, as well as to exclude insurance coverage for the entire oil sands industry. History will not look kindly on any company that continues to insure massive oil expansion projects in 2022.”
Photograph: Protesters take part in an Extinction Rebellion demonstration on Westminster Bridge in London, Friday, April 15, 2022. Climate change protesters blocked traffic by blocking four London bridges. Red double-decker cars and buses backed up along the roads as hundreds of Extinction Rebellion activists occupied London’s Waterloo, Blackfriars, Lambeth and Westminster bridges, calling for an end to new investment in fossil fuels. Photo credit: Stefan Rousseau/PA via AP.