AXIS Capital Holdings Limited has announced a new policy addressing underwriting and investments related to thermal coal and oil sands. The policy, which is meant to support the transition to a low-carbon economy, is part of a broader corporate citizenship program led by Conrad Brooks, AXIS general counsel, and overseen by AXIS President and CEO Albert Benchimol and the Corporate Governance and Nominating Committee of the AXIS board of directors.
The new program focuses on four key areas: environment, diversity and inclusion, philanthropy and advocacy. Under the new policy, which takes effect January 01, AXIS will not provide new insurance or facultative reinsurance for the construction of new thermal coal plants or mines, oil-sands extraction and pipeline projects, and their dedicated infrastructure. Nor will it provide new insurance or facultative reinsurance to companies that generate 30% or more of their revenue from thermal coal mining, generate 30% or more of their power from thermal coal, or hold more than 20% of their reserves in oil sands.
Renewals will be considered on a case-by-case basis until January 01, 2023. Exceptions to the policy may be considered on a limited basis until January 01, 2025, in countries with limited access to alternative energy sources, AXIS Capital said.
AXIS also said that it would not make new investments in companies that generate 30% or more of their revenues from thermal coal mining, that generate 30% or more of their power from thermal coal, or hold more than 20% of their reserves in oil sands.
“We believe insurers have an important role to play in mitigating climate risk and transitioning to a low-carbon economy,” Benchimol said. “This policy is in line with our broader strategies such as reducing investments in lines that do not align with our long-term approach, investing in growth areas such as renewable energy – where we are a top-five global player – and growing our corporate citizenship program, a core focus of which is creating a positive environmental impact.”
“We strive to ensure that every business decision we make is guided by our corporate values, and we believe this new thermal coal and oil sands policy is the right thing to do for our planet and our business,” Brooks said.
AXIS Capital is the first US insurer to restrict insurance for both coal and oil sands – a move that won praise from environmental advocacy groups.
“We welcome AXIS Capital’s new policy as a major win for our climate and for Indigenous rights,” said Elana Sulakshana, energy finance campaigner at Rainforest Action Network. “AXIS has raised the bar for US insurers by restricting both coal and tar sands insurance. The ball is now in Liberty Mutual and AIG’s court to take responsibility for their role in the climate crisis.”