MELBOURNE (Reuters) - Australia’s QBE Insurance Group Ltd plans to stop offering new policies for thermal coal mines and coal-fired power stations to help encourage a low carbon economy and combat climate change.
The country’s third-largest insurer said it aims to phase out all direct insurance services for thermal coal customers by 2030, but will still invest in and insure metallurgical coal and oil and gas companies.
Fossil fuel divestment has gathered pace over the past few years as pension funds, sovereign wealth funds and universities have sold oil, gas and coal stocks, especially after the 2015 Paris climate agreement set a goal of phasing out the use of fossil fuels this century.
Eleven major re-insurers including Allianz, AXA SA, Swiss Re, Munich Re, Zurich have restricted underwriting for coal, according to Melbourne-based non-government organization Market Forces.
“We are acutely aware of the risks and opportunities that climate change presents for our customers and our business,” QBE said in a weekend statement.
From July 1, it will no longer offer any new direct insurance services for construction projects for thermal coal mines, coal-fired power stations or thermal coal transport infrastructure, it said.
QBE will also target zero direct investments from the thermal coal industry by July 1, while restricting any coal exposure to half a percent of total funds under management.
The insurer has been restructuring its business after 2017’s record annual loss when hurricanes swept the Atlantic and earthquakes rattled Mexico, selling its Latin American and some underperforming units.
Thermal coal is used primarily for heat, while metallurgical coal is typically used to produce steel.
An insurance division of BNP Paribas, France’s largest bank, said last month said it would no longer finance power generation companies where coal-fired power accounts for more than 30 percent of installed capacity.
Reporting by Melanie Burton; editing by Richard Pullin