Industry needs to manage risk of new climate reputational norm

The efforts of climate campaigners against the insurance sector shows no signs of easing up.

This week saw the offices of eight Lloyd’s of London managing agents targeted by activists with graffiti with the threat of more to come.

Those eight are underwriters which, according to the climate groups, have so far refused to rule out insuring the East Africa Crude Oil Pipeline.

The offices of Chubb, Travelers Syndicate Management Limited, Lancashire Syndicates Limited, Chaucer Syndicates, Talbot Underwriting, Liberty Managing Agency, Hiscox Syndicates and Tokio Marine Kiln Syndicates, were targeted with a stencil saying, ‘Don’t Insure EACOP’.

Jane West from Money Rebellion said: “Lloyd’s insurers have been aware of the climate and human rights impacts of this project for over a year now. They have been asked nicely but have continued to put short term profits above people and planet. We’re not asking nicely any more.”

The pipeline has been embroiled in controversy since it was announced. Campaigners say 25 major banks and 23 major (re)insurers have ruled out support for the pipeline. Campaigners see the Lloyd’s marketplace as a key battle ground to cut off insurance for the project.

Though construction has not started, the controversial EACOP project, being led by French oil company TotalEnergies. The campaigners said the scheme has already resulted in scores of project-affected persons and frontline activists suffering violence, intimidation, and land use restrictions.

They add the compensatory processes have been unfair, leading many communities impacted to suffer the unfair loss of their land and other income-generating streams due to the pipeline’s development.

“Local communities and activists have also raised concerns about the project’s potential impact on the environment and the well-being of those who live in the pipeline’s path, not forgetting that the EACOP could trigger a dangerous spike in carbon emissions and the apparent threat to local wildlife populations, including protected and sensitive ecosystems,” Money Rebellion added.

The bigger issue is the insurance sector, along with other financial services sectors, has found itself at the forefront of the campaigners ire. The very thing that makes insurance so vital to the world’s economic prosperity is the very thing that is putting it in the climate groups’ crosshairs.

Insurance is asked to cover every conceivable risk and without that cover businesses would simply be unable to operate.

Therefore, the campaigner know the best way to stop the use of fossil fuels and carbon intensive activities is to cut off the supply of insurance.

Many years ago when the issue of the insurance of high emission operations was discussed at a global conference in Dubai, I asked one CEO why they did not simply refuse to insure such risks.

His reply: “If we do not someone else will.”

Clearly times have changes and the industry is acutely aware of the rising public concern over ongoing climate change and its impact.

However, it is also clear that the transition to a fossil fuel – net zero future will take decades. Therefore insurers will need to batten down the hatches as there is little likelihood that the climate campaign against their perceived actions will cease.

Jon Guy, Editor,

Emerging Risks