Insurance companies are failing to protect "both people and planet" by continuously supporting initiatives aggravating climate change, according to an investigation.
The insurance industry is contributing to global crises through its underwriting and investment activities says the investment charity, ShareAction, who carried out the research. ShareAction says this is helping drive a "triple whammy" effect; exacerbation of global warming, destruction of the natural environment and neglect of human rights protection.
Their research looked at 65 of the world's leading insurance companies, including life and health, property and casualty, and Lloyd's of London, the investigative report showed two insurers among those examined have pledged to stop underwriting four of the world's most contentious fossil fuel projects.
This includes an Australian coal mining operation notorious for its heavy carbon dioxide emissions, as well as the controversial Rosebank oil field in the North Sea. The report says over 80% of these insurers have not set any limitations on underwriting based on factors such as human rights, workers' health, conventional weaponry or aboriginal rights.
And 30% of the insurers assessed scored zero for policies that would protect the natural environment and biodiversity. In terms of environmental and social policies, UK's flagship marketplace, Lloyd's of London, found itself at the bottom of the pack, positioning it as one of the poorest performers.
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The company, along with its top managing agents who oversee business units known as syndicates, has been scrutinised in ShareAction's recent analysis. Lloyd's, accounting for 9% of the global fossil fuel underwriting market, was slammed with the lowest score for its policies by ShareAction, depicting a rather bleak image of one of the insurance world's heavyweights.
On the flip side, Axa Group stood out as one of only two firms to secure over half the points on offer in the charity's assessment, marking it as a top-tier performer. Aviva was also praised for its standing relative to other insurers in the property and casualty league, despite bagging just 45% in the survey.
The rankings were based on various indicators reflecting the companies' stance on climate change, biodiversity, and social issues. Claudia Gray, head of financial sector research at ShareAction, said: "This report reveals the insurance sector's abject failure to live up to its responsibilities to protect both people and planet. They have a both a moral duty and business opportunity to adopt responsible investments and underwriting activities."
Insurers invest the premiums they collect from individuals and businesses who take out an insurance policy, which can mean money goes to companies and projects with negative social or environmental impacts.
Jonathan Middleton, senior researcher at ShareAction, said: “What these rankings show is just how long a journey the insurance industry has to go on to meet net-zero targets, protect nature and meet their obligations to safeguard human rights. It is vital that they begin that journey immediately to ensure a sustainable future for both people and planet as well as for the sake of their own long-term viability.”
ShareAction said it will start meeting with some of the insurers it investigated to discuss the findings and how standards can improve.
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