AXIS Capital Holdings has announced several updates to its fossil fuel underwriting and investment policy related to thermal coal, oil sands and the Arctic National Wildlife Refuge.
The company has committed to phasing out thermal coal business from its insurance, facultative reinsurance, and investment portfolios. The company has committed to ending all such activities no later than 2030 in the European Union and Organisation for Economic Co-operation and Development countries, and no later than 2040 globally. The move makes AXIS Capital the first North American insurer to commit to phasing out coal business.
AXIS has also included thermal coal developers within the scope of the new policy. The policy continues to include provisions in support of renewable energy projects and companies that are transitioning their business models away from thermal coal and oil sands, AXIS said. The new measures are in addition to previously announced restrictions on activities in the Arctic National Wildlife Refuge.
AXIS has also announced that it will invest $20 million in BlackRock’s Climate Finance Partnership, a fund focused on climate-infrastructure investments in emerging markets.
“It is our belief at AXIS that the reinsurance industry needs to move to the forefront of the efforts to transition to a low-carbon economy,” said Albert Benchimol, president and CEO of AXIS. “Today’s actions reflect the determination and commitment of our team to contribute to positive environmental change.”
The policy changes support the company’s broader corporate citizenship initiative led by Conrad Brooks, AXIS general counsel, and Anna Kukowski, Corporate Citizenship Committee chair. The initiative is overseen by Benchimol and the AXIS board of directors’ Corporate Governance and Nominating Committee.
“We are very proud to announce these enhancements, but much work still remains,” Brooks said. “We’re committed to building on these actions and growing our efforts to help create a more sustainable future. We look forward to engaging with talent and collaborating with companies that share our beliefs and values.”
The policy change was welcomed by environmental groups, which called on other insurers to follow AXIS Capital’s example.
“We welcome AXIS Capital’s new commitments on coal as a major win for the climate,” said Elana Sulakshana, senior energy finance campaigner at Rainforest Action Network. “By ruling out coal developers and setting out 1.5ºC-aligned dates for phase-out of the sector entirely, AXIS Capital has raised the bar for insurers in the US and globally. As AXIS ramps up ambition, all eyes are on AIG, Berkshire Hathaway, Travelers, and other US insurers that lack any coal restrictions. Furthermore, Chubb, The Hartford and Liberty Mutual should take note and match these best-practice measures, as their coal policies remain riddled with loopholes.”
However, environmental activists say the insurer’s policy needs to go further – particularly when it comes to Arctic oil exploration. The policy does not rule out support for oil and gas exploration in other parts of the Arctic, which activists say poses threats to local ecosystems and the rights of Indigenous people.
“It’s unfortunate that AXIS Capital would commit to one area of the Arctic but not another,” said Nauri Toler, environmental justice organiser at Native Movement. “Is one village worth more than another? Is one family worth more than another? Half measures won’t do anymore. AXIS Capital must commit to stop insuring all Arctic destruction.”