Insurance Companies and Coal
Leading insurance companies have started to exit the coal sector. Japanese insurers need to take action now.
Insurance companies are one of the hidden hands shaping modern industrial society. Without insurance, no infrastructure project or factory could be built or operated.
Without insurance, few new coal mines or power plants would get the necessary funding and government permits to be built, and most existing coal facilities would have to close down.
Insurance companies have warned about climate risks for decades – and with good reasons. Their losses from climate disasters have skyrocketed in recent years. And the CEO of a leading insurer has warned that a +4 degree world would be “uninsurable”.
Moving away from coal
Since 2017 leading insurance companies have started to move away from coal. By May 2019, 14 large insurers – including industry giants like Allianz, AXA, Swiss Re and Munich Re – had adopted policies to stop or at least limit insuring coal projects. More than 20 major insurers have also divested their assets from the coal industry.
According to Willis Towers Watson, a global insurance broker, the exit of insurers from the coal sector has already made it more complicated and expensive for coal companies to find insurance for their projects. But insurers from Japan and other Asian countries need to join the momentum away from coal so it can reach critical mass.
What about Japanese insurers?
MS&AD, Tokio Marine and Sompo are among the leading global insurers in the power and energy sectors, including for coal projects. In addition, Japanese life insurance companies are major investors in coal companies.
Japanese insurers have made public sustainability commitments in recent years, but they continue to insure climate-destroying coal projects:
MS&AD is the world’s fifth largest property & casualty (P&C) insurer. It has committed to reducing its carbon emissions in line with science-based targets but continues to insure coal.
Tokio Marine is the world’s sixth largest P&C insurer. It has joined the Japan Climate Leaders Partnership and pledged to reduce its carbon emissions in line with science-based targets. Yet the company also continues to insure coal.
Sompo is the world’s 11th largest P&C insurer. It chairs the committee for corporate social responsibility of Japan’s powerful business federation Keidanren and has committed to reducing its carbon emissions in line with science-based targets. Yet Sompo also continues to insure coal.
Nippon and Dai-ichi Life
Life insurers Nippon and Dai-ichi Life have committed to no longer fund coal projects. Yet they have not divested their massive assets from coal companies.
Japanese insurers need to stop insuring coal projects and divest from coal companies, or they will lag further behind best practice in the international insurance industry.
No Coal Japan and the Unfriend Coal campaign call on Japanese insurers to immediately
- Stop insuring coal projects and companies.
- Divest from the coal industry.
- Bring all their business operations in line with an increase of global average temperatures of maximum 1.5 degrees.